How far below GV do you think a 40 sq metre appartment should be priced?

[rozzle]

Hi everyone,

I am looking at buying an appartment which is 41.5 sq m in size (+ 15.3 sq m deck) ... though Quotable Value lists the size as 39 sq m, hmmmm. The appartment is being listed at $215,000 which is only $5K below its GV. An e-valuer report from QV has comparable sales where the sale price for smaller appartments is much lower than GV (more so than for appartments bigger than 50 sq m). What kind of discount on the GV do people think is reasonable right now?

Thanks,

Ros

[Green Fish]

(1) Take each recent sale in turn, and calculate the ratio of the GV to the sale price.

(2) Take out the sales that appear unusually high or unusually low.

(3) Calculate the average ratio of GV to price.

(4) Apply that ratio to the GV of the target property.


Note that GVs are very rough and ready, given that their purpose is to allocate the rates burden between ratepayers. But it's the only way to compare apples with apples, apart from a physical inspection of all the sale listed.

Note also that the information will be two months old, at least.

[Dean@Massiveaction]

You want it to be at least $50 a week cashflow positive pre tax after ALL expenses. Discount off GV is irrelevant, keep yourself safe!!

I'd work my interest on 8%, that's NZ's average.

[wotstheguts]

I agree with Dean. Pointless even considering the GV. Look for a decent yield; on an apartment this small you want at least 8% net. If in doubt get a valuation.