Market value versus capital improved value

[Mary1946]

How do you find out the relationship between market value and capital improved value? Have been told that some suburbs have a market value about 10% above capital improved value( as a rule of thumb). Just interested before we make an offer.

 

[tobe]

Historically, CIV on the rates notice beared no resemblance to market value. Nowadays its pretty close to the money, that is close to a bank valuation at least.

 

[Peter_Tersteeg]

Unfortuantely there's no real reliable rule of thumb. Usually I've seen rates notices below the actual value but I've also seen them over or close to the actual value.

 

[Logica]

Statutory valuation standards demand that on average houses CIVs are close to the market values as evidenced by sales data. However, if a house hasn't sold for a long time it sort of flies "under the radar" andit's value can be well under the true market value. Particularly if extensively renovated in the meantime... The only reliable way to estimate the market value is to conduct a comparable sales analysis adjusted for differences.

 

[Dazedmw]

While they should be the same thing usually CIV is calculated through a desk-top valuation where a formula (based on land/building sizes and market average sales) in excel is dragged down a column of possibly hundreds of properties and Market Value is based on a full inspection of a property and review of more directly comparable recent sales.

Therefore while they are supposed to be similar the methods used to obtain the values can result in large differences.

 

[Jake Milne]

While they should be the same thing usually CIV is calculated through a desk-top valuation where a formula (based on land/building sizes and market average sales) in excel is dragged down a column of possibly hundreds of properties and Market Value is based on a full inspection of a property and review of more directly comparable recent sales.

Therefore while they are supposed to be similar the methods used to obtain the values can result in large differences.

I agree with this.

 

[tobe]

just to get technical, the 'market value' of a property is determined by the vendor as defined by the estate agent. As in, the lowest price the vendor would accept on any given day. Its not an objective measure.

the valuation for a bank might be determined by the contract of sale, the rates notice or CIV, a desktop or full valuation. Which method the bank determines is based on which bank, and other aspects of the home loan application.

 

[Aaron_C]

I use CIV as a rough guide but that's it - a guide. My own home has a CIV over $300,000 more than I paid for it only 6 months ago. I wish it was worth that much

 

[Selinarra]

Aaron,

I hope you plan to make an objection in July. We are quite lucky in my muncipality, CIV's are all well under market value. Further reiterating the inconsistencies everyone else has already mentioned.

Selinarra

 

[7smurfs]

Mine are also well below market value - and that's with a recent bank valuation to confirm the inconsistencies!