The Block 2019 - Valuation ?

Discussion in 'Loans & Mortgage Brokers' started by [email protected], 14th Nov, 2019.

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  1. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Last weekend 5 units were sold in a row to 5 buyers at public auction. Each was slightly different in floorplan and style etc. But all largely identical in area and location etc.

    Have some questions concerning potential valuation by a lender. And lets assume for simplicity its the one lender in each case so there is no impact on different lender val policy.

    Sales :
    So lets dumb this down and assume each buyer seeks a loan and servicing poses no issues whatsoever. Lets assume they want to borrow 80%

    What value would be used ? 80% of what ??


    - Actual sale price ? Variance is $246K between highest and lowest.
    - Lowest sale price ?
    - Some other "value" ? ie less than sale prices ....eg does a lender strip out of the interior fixtures and furniture and appliances etc ? The interior fixtures are quite high value at cost but potentially may have little value on disposal. eg Gumtree. I cant imagine any lender would allow the valuation of furniture, a free car (?) or the like to be unadjusted. How may that work ?
     
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  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney

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    Each unit would likely value at purchase price. They are all slightly different and were sold at auction. But part of the purchase price may include furniture? - which won't be lent on.
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

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    It's a styling show, the purchase price included the furniture etc. So a depreciation shedule would be required for the hard construction costs.

    Now for the hard question: as it would have been the sale of 'new property', would the banks valuation exclude the GST which would be part of the purchase price (on drop of the hammer)
     
  4. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    GST isnt a additional element of cost and is just ignored for new residential premises values etc whether or not it is included in the price but excluded for Commercial property as no lender typically lends the GST since they may likely claim a credit. A buyer of new resi premises can never claim the GST and so it is part of the cost / value. The selling price is a market price whether it includes GST or $1 or 1/11th. It wont matter. Its like cars. A dealer sale includes GST but a private sale shouldnt. It doesnt make it cheaper as such.
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

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    Thanks for clarifying.
     

The ABS tells us that household wealth has increased 35.3% but is that of any real use or comfort when it is all tied up in our home? They say cash is king and with prices escalating together with interest rates, that needs to be key to your budget.