Assessing a property's value requires some homework
Corporations hire professional valuers to put price tags on real estate based on complex mathematical models and market data. For the average homebuyer, such services are out of reach. The presence of property speculators can also make the market value of a flat a fast-moving target that an agent without your best interest at heart will take advantage of. Aside from looking at recent transactions in the building or neighbourhood where you hope to buy, Cliff Tse, national director of valuation advisory services with Jones Lang LaSalle, has this advice:
Prices for typical mass residential properties younger than 10 years may vary a little. The main differences are in attributes such as floor level and view. However, prices of older properties may vary by as much as 20 per cent, even though the attributes are similar. The main reasons are in maintenance and interior decor.
Young couples benefit most from buying new flats from developers becausenew developments usually have recreational facilities. Most developments built since 2003 have high ceilings and green features such as balconies and utility platforms - features that were previously scarce. So new developments are priced higher than older ones in the same neighbourhood.
Buyers should check with their banks if valuations match the purchase price they have been quoted. For new flats, banks may discount the cash rebate offered by developers to buyers and determine the mortgage loan based on the discounted purchase price.
Illegal structures built to create more living space are commonly found in old buildings or buildings without good property management. Buyers should consult building surveyors to ascertain the costs of removing illegal structures before making a formal offer.
Buyers should ask more than one bank for an estimated market value of a property for mortgage lending as well as for reference to ensure they pay the market price. Banks will consult their valuers. This service is free, so take advantage of it.