What is Property Valuation?
As the name suggests, property valuation is an assessment of a property’s current value, based on multiple factors and should be carried out by a professional qualified surveyor/ valuer.
For example, it is important for both buyers and sellers. If you are looking to sell or rent your property, then a valuation will help you get an idea of a fair asking price before you put the property on the market. Likewise, if you are looking to buy a property, a valuation will help you on what offer you should make to purchase the property of your interest.
Why appoint an RICS member to undertake a valuation?
RICS members must comply with the Red Book and valuation standards and are also bound by the RICS Rules of Conduct, which ensure integrity, a high standard of service, duty of care, professionalism, appropriate skill, experience and knowledge and objectivity in valuation reports. The RICS, promotes and enforces the highest professional guidelines and is the world's leading professional body for qualifications and standards in land, property, and construction.
Are there any standards followed in Cyprus valuations?
Cyprus itself does not have specific valuation standards. However, we operate under the Royal Institution of Chartered Surveyors (RICS) Standards. In Cyprus, all valuation professionals need to be registered by ETEK, the Cyprus Scientific and Technical Chamber.
What documents are required for a property valuation?
Depending on the nature of the property, the documents normally required are:
- The Title Deed
- Architectural plans if any
- Planning and Building permits if any
- Certificate of Final Approval if there is
- Rental Agreement/s if any
Factors that influence property value
The key factors, but not limited to, that affect a property’s value are:
- Location: Location is one of the most important factors that affect real estate values. Location aspects that are considered include, the proximity to the city centre and/ or the highway, proximity to the coast, surrounding neighbourhood and types/ quality of properties, local facilities and amenities such as schools, malls, shops, parks and green areas, accessibility, road infrastructure, upcoming development projects.
- Building type, condition and age: Age in combination with the condition and the structure of the building, are factors to consider when determining property values. Aspects to look are, for example, if the property is new, as good as new, first occupancy, if it is well maintained, if in need of renovation, possible defects and damages, etc.
- The Size of the land and the building.
- Features: Features such as extra bathrooms, garages, office space, swimming pool, outdoor areas and landscaping as well as the equipment of the property for example the quality of windows/ glazing, wood works, flooring finishes, heating, air conditioning, electricity wiring, etc can have an impact on property values.
- Local Planning/Building Regulations: For example, the allowed building density and number of floors.
- Recent Comparable Sales: A valuer will collect and analyse comparative sales of similar properties in the area, considering the physical and legal characteristics of the comparables and making all the relevant adjustments to estimate a property’s value.
- Supply and Demand: Simply said, if there’s a high demand for specific properties in a location, then expect the values to increase. If a particular area has an oversupply of properties but not enough buyers, then prices tend to go down.
- General Economic Factors: Both national and local economic conditions will influence people’s ability to sell or buy property. When the economy is booming, the buying power of people increases, and they are more likely to invest in real estate.
- Caveats or encumbrances on the property.
Who Needs Property Valuation?
Property valuation is a wide sector that is needed by various stakeholders, for example:
- Real estate developers
- Financial Institutions
- Buyers/ Investors
- Individuals who just want to know their property value