Which valuation approach would be most appropriate for valuing a newly constructed office building with no rental history?
Correct Answer
C) Summation approach based on land value plus construction costs
The summation (cost) approach is most suitable for new buildings where construction costs are known and reliable. This method adds land value to the depreciated replacement cost of improvements.
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What is the primary purpose of a Comparative Market Analysis (CMA) in property valuation?
Which of the following is NOT one of the three main approaches to property valuation recognised by the Australian Property Institute?
In the summation approach to valuation, what does the term 'depreciation' primarily refer to?
When using the capitalisation approach for an investment property generating $52,000 annual rental income, what would be the estimated value using a 6.5% capitalisation rate?
A property valuer is assessing a 15-year-old commercial building. The replacement cost new is $2,000,000, land value is $800,000, and total depreciation is estimated at 25%. What is the property value using the summation approach?
- → Which factor would have the LEAST direct impact on a residential property's market value in a CMA?
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- → What does CMA stand for in property valuation?
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