Saturday, February 8, 2014

L.A.M's Property Valuation Tool

I have been doing abit of house hunting and along the way there were many variables to consider, so I decided to just create a simple valuation tool to help me to decide whether to consider purchasing the property (Download Link Below).

https://drive.google.com/file/d/0B9IgWwXHEwE6OTh0X3BqTFRUS1U/edit?usp=sharing



Brief Description:

This tool uses the comparable transactions method with adjustments to valuate a property.

How to use:

1) Select the name of the property in cell A1.

2) Click on Download Comparable Transactions button (macros need to be enabled for this, on how to enable macros see link: http://office.microsoft.com/en-sg/excel-help/enable-macros-to-run-HP001119579.aspx)

Note: This process will download a list of comparable properties from the URA website. Please note that it will take about 10 seconds. Once complete, the following message below will be shown:



3) Input the input variables of the property you are looking at in the light green cells (Cells B9-D9, F9, B22 and K4 to K9)

4) Based on your inputs and your comparable properties, cell B23 will return a Y or N value to the question of whether you should consider the property.

5) To find your breakeven transaction price, you can click on the Breakeven Price button and the value will be generated.

How it works:

This tool downloads a list of comparable transactions from the URA website and then does adjustments based on the floor size (in sqft), lease remaining (in years), floor category of the unit and other adjustment factors. After this, a market discount is added which is determined by the preset input in cell K6.

Finally, based on a the asking price, a yield is determined. If the yield is higher than your hurdle rate, then  the property is worth the toolkit considers that the unit is worth considering.

PS: This is just an amateur tool, designed by me to valuate properties based on my own assumptions and consideration sets, if you have any feedback or comments on how to improve this tool, feel free to comment in the comment section below. Another point to note, this tool only applies to resale Private/EC properties in Singapore.

L.A.M.

For a tool on when is the ideal time to sell your leasehold unit, see my other blogpost: http://johnislam.blogspot.in/2014/02/lam-on-value-of-hdb-flats-at-end-of-99.html

6 comments :

Willis said...

Really interesting. Any possibility of tweaking it for HDB use? Wouldnt HDB have more data that can be used?

John Lam said...

Hi Willis, that is a good question. Yes I can tweak it slightly to use transactions data from HDB. I am sorry to say I haven't started any work on this but I will once I find a suitable source of data.

Anonymous said...

Your macros are not working. The download of comparable transactions from the URA site is not happening.

Elson Cade said...

The couple has protested the county's valuation of their home for the past several assessment cycles, usually to their benefit. But this year is the first time they've seen a jump this large, with the assessed value of their property jumping from $400,000 to $580,000.
The bump moved their home from among the least valuable on their street to the top third, according to research by David Ryn. County-wide, re-assessments resulted in an average property valuation increase of about 17 percent in the two years since it was last done.
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pirater021@gmail.com said...
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