The valuation standard consists of 4 elements:

  1. investigating comparable sales/rental properties
  2. selecting the suitable analytical approach
  3. applying selected analysis techniques to market evidence
  4. analysing market trends and other factors.


The valuer's continual quest is to find and adjust comparable sales for use in determining market value. Sales evidence can be classified as follows:

  1. primary
  2. secondary
  3. tertiary.

primary sources of information
secondary sources of information
tertiary sources of information


Just when we thought the definition of market value was well and truly decided after Spencer and the modified Spencer (Tuner and Closer Settlement cases) and JF Murray, academia finds a number of American textbooks and with the influence of RICS and tries to change Australian valuation theory.

Yet Australian valuation theory is simple; market valuer is the willing buyer and willing seller theory under Spencer . The Institute can sign as many overseas agreements about international standards as much as its likes but the practising valuer has to determine Spencer. Why? because the courts say so.

Australia has a well tried and working definition of market value that provides the profession and industry with certainty. Critics say that Spencer is a normative definition and therefore, must be inferior to a non normative definition (eg value in exchange). But "normative" is used as a pejorative term and the willing buyer willing seller theory would only be inferior if it could not be used for example, where there are no "ideal" sales available.

However, the practising valuer knows that there are a number of comparable sales, many needing only small, and reliable "opportunity cost" adjustments to make them comparable to the subject property. Too much emphasis is placed on the quaint 1907 language of Spencer and modified Spencer should be used instead. Modified Spencer is basically the use of a sale price that has been subject to adequate or typical exposure in the market place. This really, is the only definition of market value required and provides a good working definition.