Auckland Apartment Valuation Methods
Apartment Specialists Podcast No: 34
Summary:
Auckland apartment valuation is done using different methods like actual comparison of purchase price or meterage. It all depends on the valuers. However, this podcast will help you look into your apartment and show you how you can increase its value.
TRANSCRIPTION:
Andrew Murray, Apartment Specialists. How is an apartment valued?
Now, an apartments' size does matter more than houses. More than anything else. And the reason why is the value of an apartment is all brought down to the value per square metre. For example, if you purchase an apartment for $400,000 and it is 100 square metres, well then the value of the apartment per square metre is 4,000 - per square metre.
What a valuer does is they come in, they talk about the market. A lot of this is copy-and-paste stuff. But really it comes down to the sales they use. And the valuer decides what sales to use. So there is a big grey area here. There is a lot of discussion that can be around - on the equity, on valuations - because the valuer can choose high sales in the building or low sales to compare. And they find values to support the value for something sold for. But anyway, stop worrying about it.
So, how it is done is for example here, this is a property in a character building and so what I have used to compare similar buildings in sales in buildings and taking every single one down to a square meterage. Say 24 Anzac Avenue, it is a three bedroom brought down to $3,496 per square meter because it is 163 square meters and it was sold for $570,000. Okay, one in the Metropolis. Okay, $540,000, 85 square meters. Divide 540 by 85, it gives you $6,353. And so, it is all about the sales price divided by the square meterage and it gives you the value.
You can see here they also use one in the building which generally is most reliant because they are much more comparable. So, for example 1C $220,000 which has 43 square meters divide 220 by 43 and it gives you $5,116 square meters.
Anyway they look at all of that giving more weight in general to apartments being sold in the building and you have evaluation. A hundred square meters and $5,200 when it costs $520,000. Now, the actual purchase price of that apartment is very similar to that and that is what most valuers will do. They will come up with evaluation very similar to the purchase price because that is what the market has shown. And they use the sales through square meterage to show us. Now, what is a very interesting question is, different valuers can show completely different values and neither is wrong.
So, it is a very interesting process. But I hope that gives you a bit of an insight to how apartments are valued. And then it will help you look at your own apartment. Or help you when you look at the value of other apartments - that compare one sale for or another sale for. And at the same or similar kind of apartment - and take it down with a square meterage. I hope that helps.
Next week I am going to be talking about-- the question I am always asked, "When should I sell my apartment? How do I know?" And back to apartment sales.
Talk to you soon.
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