Valuing a property
The way i see it, there are 2 things to focus on when valuing a property
Land value per sqm: surroundings , infrastructure ect
Cost of building.
So for example you have a house that is valued at $800000
Land value is $450000
Cost to build is $350000
So if there is a 25% drop in prices does this come off the value of land ?
The cost of building , labour cost ect are not dropping so the answer would be yes.
My thoughts on the rise of property in the past is that it has been driven by a lot of factors but one topic that hasn’t been discussed is the cost to building.
I cannot see the property prices decrease more than say 20%, any more will require the tradies and builders to take a pay cut, cannot see this happening soon.
JC
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