While property valuations typically occur upon completion, Acumentis is frequently engaged to assess the value of units and dwellings while they are still under construction. This requirement often arises during long-term development cycles—which can span several years—particularly when life events such as legal separations necessitate a valuation before the project is finished.
The following overview outlines our professional methodology for assessing "as-if-complete" values in a fluctuating market.
The Complexity of Mid-Construction Unit Valuations
Valuing an unfinished strata-title unit is a nuanced process. Because purchasers are often tied to unconditional contracts with 10% deposits, they are exposed to market volatility. While developers may benefit from a rising market, they are unlikely to release a buyer from a contract if the market declines.
Critical Limitation: No Future Forecasting
It is a fundamental principle of professional valuation that we do not estimate future property values. We cannot predict economic shifts, interest rate fluctuations, or geopolitical events. Our assessments are strictly based on the market conditions and data available at the specific date of valuation.
Methodology for Strata Units
To accurately assess a unit that does not yet physically exist in its final form, our valuers require a comprehensive "paper trail" to understand the property's future attributes:
- Required Documentation: We must sight the original contract of sale (often exceeding 100 pages), including full architectural plans, specifications, proposed survey plans, and Community Management Statements.
- Site Inspection: Whenever possible, a physical walkthrough is conducted to verify view lines and layouts. If safety regulations or construction phases prohibit access, the valuer performs a "curbside" assessment, leveraging prior knowledge of the area and comparable local developments.
- Market Evidence: We analyse contemporary sales of similar properties outside the development. Additionally, we consult with the developer to monitor internal resale activity and absorption rates, which provide a snapshot of current supply and demand.
Note: For units, we provide an "as-if-complete" value. We do not provide "as-is" values for unfinished units, as the valuer cannot accurately determine the specific remaining construction costs or developer margins.
How House Valuations Differ
The process for detached housing allows for an additional layer of financial clarity due to the nature of residential building contracts.
| Feature | Unit Valuation (Mid-Const.) | House Valuation (Mid-Const.) |
| Primary Value | As-if-complete | As-if-complete |
| Costing Data | Generally unavailable | Based on Fixed-Price Building Contract |
| "As-Is" Ability | Not typically feasible | Feasible by deducting "Cost to Complete" |
| Risk Factor | Market-based | Includes an "Inconvenience/Risk" discount |
For houses, we review the progress payment schedule within the building contract. This allows us to calculate an on-completion value and then deduct the remaining costs to finish the build. We also apply an "inconvenience factor" to account for the risks a hypothetical purchaser would assume when taking over a mid-stage construction project.