Value Australia is an innovative new collaborative project which aims to address the challenges with Australia’s current approach to property value assessment through automated, transparent and interactive property valuations.
The Challenge
Land and property is the nation’s single largest asset class. The valuation of these assets is used to collect land tax, inform infrastructure investment and lending for homes, along with modelling insurance risk and investment returns. Property tax currently contributes $50 billion p.a. across Australia, supported by an estimated $300 million p.a. of costs to government. Services for banking and finance are delivered by the property valuation industry, costing over $350 million, of which more than 75% is wages.
The current labour-intensive approach to land and property value assessment results in expensive, subjective, slow and often out of date valuations for property, particularly for urban fringe (peri-urban) and regional land. These shortcomings coupled with the emerging cyber threats to the underpinning valuation data infrastructure, require a collaborative approach between industry, government and researchers to develop secure, scalable, and commercially viable solutions.
The consequences of subjective valuations include sub-optimal and inconsistent planning, forgone tax revenues, disputed valuations, inconsistent lending and insurance risk decisions, and the inability to capture land value uplift to fund transformational infrastructure.
Partners
The Value Australia team was an ideal collaborative mix, bringing together research (FrontierSI, UNSW), industry (Commonwealth Bank of Australia, Omnilink), State Government (Office of the NSW Valuer General) and local council (Liverpool City Council). The project received support through the Federal Government Cooperative Research Centre Project (CRC-P) grants.
The Solution
Value Australia integrated research, significant data assets and state-of-the-art analytics and artificial intelligence to deliver secure digital valuation models and tools covering a broad range of land and property types across Australia and overseas. The result aims to be an efficient and accurate land and property valuation product. The valuation of these assets is used to collect land tax, inform infrastructure investment and lending for homes, along with modelling insurance risk and investment returns.
Value Australia built on two years of pilot work across metropolitan Sydney and Brisbane through the award-winning RAISE project which has developed a range of Automated Valuations Models (AVMs). Value Australia expanded on this base to produce a national suite of data and software products. This included:
- Open, cloud-based architecture to combine data, models, and visualisation.
- An interactive scenario explorer ‘toolkit’.
- Collaborative visualisation methods.
- Applying the toolkit to automated valuation modelling.
- Using the toolkit to land value uplift modelling.
Impact
Value Australia created scalable, efficient, secure, and accurate tools that respond to a variety of land and property types and uses across Australia, with export market potential. The automated valuations tackled industry identified shortcomings including:
- Sub-optimal and inconsistent urban and regional planning.
- Forgone tax revenues.
- Disputed valuations.
- Inconsistent lending and insurance risk decisions.
- The inability to easily capture land value uplift to fund infrastructure.
Fast, secure and accurate land and property valuations are critical for land management, planning, finance and risk decisions. Property valuation services to the banking and finance sector cost over $350 million a year, and it is estimated that more than 75% of valuation costs are wage related. This project is enabling substantial financial savings for the sector.
Contact
To learn more, contact FrontierSI at contact@frontiersi.com.au.
