TOLD YOU SO
We appraise apartment values in three different ways and they tend to come together eventually to give us a credible figure…FOR THE MOMENT.
The Apartment Market is moving as we have been predicting and the importance of that horror word….”AUCTION”…is becoming increasingly critical in allowing the market to “breathe”.
More of that shortly.
Here are the three methods of appraisal:
1) COMPARABLE SALES – this is the compilation of similar suites and their sale prices taking into account their sale date.
2) CAP RATES – too complex here to describe in detail (buy my book “REALTOR BIBLE” where ALL is revealed) but we track nett returns of similar apartments checking whether rentals involved were to market or not and establish a pertinent “Cap Rate” for the subject property. This divided into the nett rent X 100 gives an estimated selling price.
3) $/M2 – this is value approached by calculating similar suites dollar per square metre of apartment. To do this we deduct our estimate of the value of the unit’s carpark (if one was included in the sale) and then deduct the area of the deck or balcony (to be academically “pure”) and the resulting sale figure is divided by the meterage.
Freehold apartments have been selling on this basis from say $4,000m2 to $6,000m2 depending on location and quality.
A Metropolis standard 46m2 one bedroom has been selling consistently at around $6,000m2 ($260,000 – $290,000).
Larger suites sell for fewer $m2.
I have seen Real Estate markets strangled by Agents who refuse (usually through a lack of confidence but often sheer laziness) to auction properties.
Values cannot move if the Agents control the market by using only “1” above…COMPARABLE SALES.
So the market is stalled, costing their trusting vendors big money until some bright spark muscles in and starts auctioning. I have witnessed the gasps from neighbours as auction results start realigning values.
Back to the top.
We auctioned a compact (yeah I’m good) one bedroom suite last fortnight near the High Court and despite three bidders and five subsequent offers our vendor stuck to his guns and ended up accepting yesterday $240,000.
The suite comprised 36m2.
Do the maths.
Yes, devilishly $6,666m2.
WOW!
Could that have happened in a month of Sundays without the power of our auction process?
No.
That’s why they call us “The Authority”.
Now YOU call us.
Because we’re real good at this.
Just don’t all stick to your guns too much because it’s hard work.
All the kids are home, first time in three years, booze bill is through the roof, Shelley's happy, the dog’s happy, I’m happy……
Cheers,
Martin
MANAGING DIRECTOR
