A valuer is determining the capitalisation rate for a retail property investment. The rate should primarily reflect which market factors?
Correct Answer
C) Rates drawn from comparable investment sales, adjusted for risk
Capitalisation rates must be market-derived from analysis of comparable investment property sales, reflecting investor behaviour and risk perceptions for similar properties. This ensures the rate reflects actual market conditions rather than theoretical calculations or individual investor requirements.
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More Valuation Questions
In applying the summation approach to value a heritage-listed property in Sydney, which additional factor must be specifically considered?
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