Mass appraisal is the process of valuing multiple properties at once using automated valuation models (AVMs). This allows assessors to efficiently value large numbers of properties for property taxation purposes.
How Mass Appraisal Works
Mass appraisal relies on statistical modelling using recent sales data for comparable properties. The valuations are generated by computer algorithms rather than individual physical property inspections.
Key features of mass appraisal in Australia include:
Automated Valuation Models
AVMs analyse various property features like size, location, number of bedrooms, bathrooms etc. and compare them to sold properties with similar attributes. Mathematical modelling is used to calculate property values.
Property Sales Database
Authorised property sales data is fed into the AVM providing vital comparable sales information. This includes land values, sale prices, property features, and date of sale.
Geographic Information Systems
GIS provides spatial data like zone maps, allowing the AVM to understand geographic influences on property values. Location within a zone significantly impacts values.
Powerful analytics examine sales trends and property influencing factors. This enables accurate modelling of value changes over time.
As new sales occur, the data is added to the valuation models keeping them up to date and valuations accurate. This allows flexibility in a changing market.
Although automated, qualified valuers oversee the process including verifying results and making adjustments to model weaknesses.
The Benefits of Mass Appraisal
Mass appraisal provides a number of advantages over individual property appraisals:
- Speed – Thousands of valuations can be generated in hours rather than months for individual appraisals. This allows councils to efficiently revalue properties annually rather than every 2-3 years.
- Consistency – Removing human subjectivity improves consistency as properties with similar attributes derive similar values.
- Cost-effective – The automation and efficiency of mass appraisal significantly reduces valuation costs.
- Analytics – The data and statistical modelling provides rich analytics to identify market trends.
- Fairness – With regular wholesale revaluations, tax burdens can be redistributed eliminating inequities.
The Use of Mass Appraisal in Australia
All Australian states use mass appraisal systems to value properties for land tax and council rate purposes. Major providers include CoreLogic and Land Use Victoria.
Most councils require annual revaluations to keep up with Australia’s dynamic property markets. The high frequency of valuations allows them to equitably redistribute rates each year.
Although mass appraisal dominates, physical inspections by valuers are still used for objections, sales analysis, and model testing. The valuers provide human oversight of the automated systems.
So in summary, mass appraisal enables Australian councils to efficiently and objectively value large numbers of properties using statistical modelling and sales data. The automation provides speed, consistency and cost-effectiveness for property taxation processes.