Property Investment 101 :6 Valuation

There are a few ways to value property

(1) Comparison - Self explanatory. This is using the price transacted for similar properties.

(2) Residual value - The amount a company expects to be able to sell a fixed asset for at the end of its useful life. This is a bit more complicated for a layman like me to explain. Involves certain formulaes and calculations. Perhaps some experts here can help.

(3) Force sale value - This is the value that government valuers will be using in a land acquisition scenario. This is a akin to a fire-sale price which will be much lower than a willing buyer-willing seller as the buyer is willing but the seller is forced.


Hi all,

regarding to the inconsistancy of the value, it probably due to the quality of the comparable property being used and it is also subject to misconduct as well. In both party, either private or government valuer. But what i would like to stress here is, for the government valuer they have most up to date data to arrived with a market value and whereas private valuer they buy the data from government on certain period of time. Due to this, comparable property being used might be different and it result to diffent value.

There are basically 5 method of valuation:
1. Comparison
2. Cost
3. Residual
4. Income
5. Investment

and force sale value is not one of it, to confirm it just ask any property management or real estate 1st year student.

This different methods is being use to serve different purposes of valuation since they have different concept in it as well as the calculation. Comparison for instance, is being used for all type of property and most popular method. Income is use for the property which is generate income mainly from rent while investment method is for property with potential for development based on planning condition.

It is a software in the market we called it SPATIALEST: the integration between MRA + GIS + GEOSTATISTIC. and it will give us consistent value and it is very systematic. However, it is only the enhancement of comparison method and it require large amount data. Suitable for government valuer but not private.

If you wnat to know more about this profession, you may ask any lecturer in public university in malaysia. currently there are 4 universities offered this program at the degree level.

there are: Universiti Teknologi Malaysia, Universiti Teknologi Mara, Universiti Malaya and Kolej Universiti Teknologi Tun Hussein Onn.

Property Investment 101 :5

House prices up 30%
Other News & Views
Compiled by NG SI HOOI, A. RAMAN AND IZATUN SHARI

HOUSE prices need to be raised by 30% due to the hike in building materials and petrol prices, Nanyang Siang Pau reported.

Master Builders Association of Malaysia president Patrick Wong said middle-range house prices had been increased from RM150,000 to RM190,000.

“The developers have no choice but to raise the price as the cost of building the houses has increased. The price of houses was adjusted two weeks ago,” he said.

Heavy inflation tends to drive property prices to go north. How i wished i could own 2 more properties by end of year =( But hey, if 3 of my current properties appreciate by 30%, there would be a permanent smile as i stroll my way to the bank =D

Posted by Kian Teck at Tuesday, June 17, 2008 2 comments Links to this post

Property Investment 101 :4

Property valuation is an issue which can be argue in different levels.
For an example : different company will certainly value a property differently which will result to a different value. Thus, it will create a lot of internal and external conflicts between private valuers, government valuers and not to forget the owner of the property.
One of the most common conflict between valuers is when land acquisition comes into picture. The owner ( whose land is effected from the land acquition) will definitely hire a valuer to value his/her land with a higer value while the government valuer will value the land in a much more lower value. And of course this will lead to high court and so on.

My concern is... is there any way we can determined the price or value of a property in a more systematic way which will give a more consistant value between valuers?
Maybe by using AI (artificial intelligent) that is the artificial neural network (ANN) rather than using the traditional method which is the multiple reggession analysis (MRA)?

Please comment. Thank you.

vasquale,
a student who is eager
to learn more about real estate.

All your comment and advice will be a stepping stone for me in my research.[/i]

Property Investment 101 :3

The Malaysian property market offers a good mid range investment opportunity to international investors seeking sensibly priced real estate with sustainable growth potential in residential sector. The constancy of the property market in Malaysia is based upon the steadiness of the country's economy which is currently expanding at a sustainable rate and benefiting from closer export ties with China as well as strong levels of foreign direct investment from the US, China and Japan.

June 08

Property Investment 101 :2

My Take is that the property market have been very stable in Malaysia because most property owner buy out of necessity. So even when the economy is bad house is the essential that will sustain itself. Unlike Singapore, Hong Kong or US where Most ppl buy property to invest or speculate. So when the economy crashes in this country the property price will crash just like the stock market. Although in Malaysia we do not experience such fluctuation in property value but there are more and more ppl who are buying property to invest. So i suspect that this time round we will see some drop in the value of property when recession hit. I am not saying that recession will definitely hit this part of the world but the is a high possibility. Its happening in the states. Property value in singapore is still very strong because it is being fuel by the influx of foreign worker. HK is correcting itself. I think when the recession hit we will see corrective action like lower interest rate by Bank Negara, thats probably a good time to start buying again. As it is, i think its folly to be investing in propety now unless u absolutely have to.

..promo.realestate.yahoo.com/home-prices-continue-sharp-descent.html

June 2008

Property Investment 101 :1

Hi boomerk, I wish i knew too. But i think that property is always the last to go down and the last to go up. As in, say a recession stocks are the first then at the end of the line will be property. Its kind of the same when things are picking up too i think.

For example just today, someone said that a condo unit that he bought for RM500k in 1997 when the prices were up is still somewhere around the same price today. But what he left out was that the price went down after the recession and is finally back to RM500k today. However, with time, inflation etc it probably still has some way to go before he gets the value of the RM500k he put in.

Quote:

Seems the property market is really lagging, KLSE is fundamentally superb, times are good, people have jobs and are making more and more money.

Actually not everybody has money. I think the richer are getting richer as usual but those of us with salaries are getting the same. Cost of things are going up, people can't afford to service their installments, so many auction properties especially low to medium-cost properties etc, so not necessarily more money in the economy. So many people last year never got a single month bonus also.

But after all this said, the spillover effect should take place and everyone should get a piece of the cake. Then we should see property prices doing better. More people will be able to afford properties thus more volume of transactions and higher value of transactions. What more with the new policies Pak lah has putting is place for the property market. I have a good feeling the boom is just around the corner. What do you think?