interpretation of valuation adjustments in market reports 

According to the CVI of the Central Plains Valuation Index (main bank), the data has been falling for four consecutive weeks, reflecting the continued downward trend in bank valuation

Under the enthusiasm of internal and external factors, the property market in the recent months has been weakened. There is no shortage of reports on the valuation decline in the market. The transaction price of the property market has fallen below the valuation, or the housing estate valuation has decreased. It also refers to the lack of bank valuation. What is the current situation? How should we interpret the relationship between current property prices and valuation?

Valuation is sometimes lower than market conditions

Property valuation refers to the market value of a building. Therefore, it will be based on market cases and conditions. The comparative method is a more commonly used method of property valuation, also known as the market approach. It is mainly based on the transaction price of similar units closer to the valuation date. This is the most straightforward way to link valuations to market realities. At present, the information is quite circulated. During the period of active market transactions, especially for large housing estates with large transaction bases, the comparative valuation of property values ​​is a way to effectively and closely follow the trend of property prices. Of course, the market conditions are cloudy and sunny. It is not the case that each housing estate has a market transaction case as a reference. Therefore, the property valuation needs to be compared with the current property price level and the property price trend.

There are two types of property valuations mentioned in the market

The first one is the online valuation service of banks. It is generally restricted to major housing estates and buildings in various districts. Users can check the property valuation on the bank’s website.

The online valuation mainly uses the market transaction base to match the property price level and development to determine the property value by the valuation formula. As the market conditions may change faster, there is an opportunity for the valuation level to lag behind the latest market conditions.

For example, when the property market began to be soft and the transaction was scarce, the valuation system did not determine the value of the housing unit. However, the value that can be accepted may have been reduced. During the period, there was a transaction case below 10% of the market value. Or, there are reports that “a low valuation of a housing estate is 10%." The valuation refers to online valuation. Many times, because online valuation does not reflect the latest market reality in time, it is not the owner’s flat. unit. If the transaction price of the property is lower than the online valuation, it does not mean that it will affect the mortgage. The second property valuation is to find the bank to directly assess whether the transaction price is “to the price" or “assess the full price". Generally speaking, the user To apply for a mortgage from a bank, the bank will only measure whether the valuation has reached the transaction price level. If the “price" can be used, the maximum number of mortgages can be calculated according to the transaction price.


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