The latest Investment Property Databank valuation figures massively underestimate the slump in the market, according to the RICS’ valuation faculty head.
Robert Peto, the chairman of DTZ UK, told delegates at the RICS International Valuation Conference today that valuers should be braver about writing down property values in the wake of the market slowdown and the credit crunch.
He said deals were being done at 10% below 30 June values – almost five times worse than the 2.2% decline reported last week in IPD’s third quarter index.
‘I’m disappointed….the truth is most investors do not believe the numbers,’ he said of the IPD index. ‘We are seeing transactions being done and we know that deals are 10% down in value on the June numbers not 2%.
‘That is evident. Valuers are doing themselves a great disservice with this smoothing of the curve.
'There is a hiatus of transaction evidence but our job is to price the market as it is now. If the evidence is historic and we feel the market has changed, we must price accordingly.’