Valuation law could neutralise LTV limits
Correct appraisal prices key for market
Loan-to-value (LTV) limits may be deemed unnecessary if the law to regulate valuation practices is enacted, say property valuers.
Kitti Patpongpibul, president of the Asean Valuers Association, said the Bank of Thailand may not have to apply the lending curbs to control speculation if the new law to control appraisers is passed.
"The LTV limits are unnecessary if the appraisal price is correct," he said. "The rules are derived from a valuation of the property price that exceeds its fair market value."
A draft of the Valuation Standard and Professional Ethics Act is pending approval by the Council of State. The draft was submitted for vetting in 2018 and is likely to be put on the back burner because the government has an abundance of new laws to wade through.
"If the new law is enacted, no one would dare price a property higher than its value," Mr Kitti said. "Appraisers in Thailand use standards applied overseas to supervise themselves."
Property valuation comprises three methods: by fair market value for a residential unit, by revenue for commercial properties such as hotels, shopping centres and offices, and by cost for a self-built home.
"If the draft of the Valuation Act is considered today, the procedures to bring it into effect will take at least one year," Mr Kitti said.
He said the property valuation law will also help reduce the valuation workload for local authorities, as there will be independent valuers helping them appraise properties if the Land and Building Tax Act is applied next year.
Somnual Laohaprasit, a director of the Valuers Association of Thailand, said valuation jobs decreased by half in the first six months of this year as banks signed off on a lower volume of loans.
"The number of mergers and acquisitions, sales of property into real estate investment trusts and fundraising in the stock market were lower this year," Mrs Somnual said.
Thailand will host the 22nd Asean Valuers Association Congress, held Oct 20-22 at Dusit Thani Pattaya. Valuer members from eight countries will join.
"Among the eight countries, Thailand is the only one without valuation laws," Mr Kitti said.