Propsocial property jpph explains valuation disparity limited commercial bungalow
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The Valuation and Property Services Department (JPPH) is encouraging property owners to submit their appeals and queries to the Petaling Jaya Land Office should they be unhappy with the valuation results of their properties.

This comes after a report by TheEdgeProperty.com about the wide disparity between the valuation of JPPH and private valuers over residential bungalows located along Jalan Gasing.

It was stated that JPPH had valued the land price for the properties along Jalan Gasing at RM4,500 psm, which is about RM418 psf, while evaluation by private valuers was set at RM3,300 psm, which translates to roughly RM306 psf.

The disparity stands at 26.7%, with property owners having to fork out higher costs when they convert the existing residential properties to commercial titles.

JPPH deputy director general (Technical) Rahah Ismail, had explained that the disparity was due to the different criteria upon which the valuations by the government and the private valuers were based.

Rahah explains that in this case, private valuers had to value the properties based on the original use of the property as stated in the land title.

This is in one with the way banks require property to be valued in considering and approving bank loans to owners who may want to apply for a loan to finance the cost of converting their properties.

As the properties were still stated as use for residence in their respective land titles, the private valuer had to evaluate the properties based on their residential titles, which can be considerably lower than that of commercial titles.

JPPH on the other hand, adopts the market approach, whereby market evidences namely recorded transaction prices and rental value are taken into account when valuing the properties.

The evaluation by JPPH also takes into account the adjustments of transaction details of residential lands with limited commercial potential.

Based on sales transactions recorded of limited commercial residences and commercial titles, JPPH had found that the selling price of residences with potential for commercial use in the area along Jalan Gasing and Jalan Universiti were about RM3,400 psm to RM4,600 psm throughout 2015 to 2016, while leasehold commercial land were sold for RM6,000 psm.

The difference in price between commercial and limited commercial titles were approximately 30%.

Hence, according to those transaction values, JPPH had reasoned that the value of a residential land converted to a limited commercial should be more than RM3,300 psm but less than RM6,000 psm.

JPPH then valued the properties at RM4,500 psm, which is 27% higher than residential land value and 25% lower than commercial land value.

She further highlighted that any other figure would be against the law as the valuation upon which a conversion premium is set should be on the market value of the property’s approved use as specified by the Selangor Land Rules.

Information and data on the transactions of property is available for purchase from JPPH offices or take the Property Market Report available on the JPPH website for reference.

The public is advised to send in their queries to JPPH through the JPPH website : www.jppph.gov.my.


(Reference: http://www.theedgeproperty.com.my/content/880388/jpph-appeal-or-send-queries-clarity-valuation-results)

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In a away, JPPH's valuation seemed "fairer", but on the other hand government is "sucking blood".