Debate on rethinking property valuation to assess mortgage lending value method

The merits or otherwise of introducing a European property valuation method here will be the topic for discussion at a meeting in Dublin next Wednesday.

The Institute of Professional Auctioneers and Valuers (IPAV) event in Chartered Accountants House on Pearse Street will debate the ‘Mortgage Lending Value’ method used in Spain, Germany, Portugal and the Czech Republic.

The concept determines a property’s valuation based on a range of factors that attempt to determine value over the longer term rather than current trends at the time of sale.

IPAV chief executive Pat Davitt says the European model could prevent future boom-and-bust cycles.

“The only system of valuing property in Ireland is one based on market value. It estimates the price that could be obtained for a property at the valuation date, notwithstanding that this value could alter over time, sometimes very rapidly, as we know only too well.

“Under the ‘Mortgage Lending Value’ system the value of a property is determined by a prudent assessment of its future marketability taking into account long-term sustainable aspects of the property such as local market conditions, the current use and possible alternate uses,” Davitt said.

The event will be opened by Minister of State at the Departments of Finance Simon Harris with speakers including chief executive of the European Mortgage Federation Luca Bertalot and economist David McWilliams.