Valuation of group housing apartments

Valuation is important parameter in real estate market and for consumer protection

All people dont engage into valuation of property before buying or selling as valuation is costly process and we are not aware।Mostly mortgaging lenders do it for own loan margins।

Valuation keeps changing like prices of shares or gold but slowly।Cash liquidity is very important।

Out of all ,valuation of condominium apartment or a flat in group housing, is difficult for common man to understand

So here is guideline and personal opinion of author।It may benefit common sellers , buyers and untrained property agents both।

First, deal only with professionals and RERA registered dealers for your safety and right deal।

We shall explain valuation by example of Shipra Riviera a condominium (group housing) developed and leased by GDA ghaziabad।Located on main kaveri marg in gyan khand 3 in prestigious Indirapuram of Ghaziabad।

It has 1260 flats in a low rise construction of blocks with 4 floors।Also called builder floors।

It was developed by GDA in ppp with Shipra Builders (P)Ltd

Factors of valuation:

1 group housing in a gated colony ( not a legally recognised word) is more expensive than open layouts।Because common land becomes its part।

2 All flats in such layouts are having super area part , which is area of building not part of  a flat।But it is co-owned by all।

3 A large mass of land with parks, facilities, roads , walk ways and community clubs etc।Lifts gyms markets where available।

This is undivided common area and assets equally co owned by all flat owners in layout।Here it is 1260 flats।

Besides this we see surrounding areas markets transport power sewage systems and potable water supply and transport।Shipra has very stable water and power supply from local public bodies and also underground water।

From all these criteria shipra Rivera gets 8/10 marks।

It has permanent green belt opposite to it , and perennial source of underground water।

It is in fully developed Indirapuram area of ghaziabad।It is close to metro and delhi Meerut highway।

Schools markets hospitals are plenty

Transport is available 24 hrs।

It is fully developed land and hence its present price of a plot inside it , would easily be 1.2 lacs per square meters for such a fully developed plot।

We also see future commercial potential of area and general trend in housing prices which is presently stable not growth oriented but will rise in 2022 onwards.

Low rise houses have own charm।

Now we proceed with valuation: components :

1 plot area on which 4 flats are built

2 super area of construction

3 carpet or covered area of flat

4 services available

5 Share of common undivided land of each flat

6 floor level of flat  like ground ,top, middle।

7 location within layout,  like park facing ,corner plot and distance from main city road, and  reserved parking.

8 Any common assets owned by welfare association।

Shipra rivera has 15 acres land excluding the  shipra tower ।

Which means 61000 sq meter।

We take average flat area of 84 sq meter

All are 2 BHK flats।

So undivided common area is 27 sq meter per flat।

Now take a 91 sq meter flat the largest here called executive flat।

This is built on typical 25x 50 sqft plot in

4 storey।

Hence per flat (usable) area  is 23 sq meter

So total flat area is 23+27=50 sq meter or  Rs 60 lacs

Add 1000 sq ft A class construction at todays rates @1400 per sq ft

14 lacs

Reduce by 2.5% depreciation per year totalling to 50% after 20 years।

Net cost of building 7 lacs।Add 30% furnishing cost or 2.1 lacs

Total cost 9.1 lacs

Hence total price of executive flat 

69 lacs 

Hence price of ground floor park facing flat 72 lacs

Top floor 68 lacs

Middle floors 66 lacs

For Annual Rental value ,it should be preferably 4%+ of current market value or more, depending on demand, floor, condition type of interiors and attached facilities like parking space।

Hence a semi furnished executive flat at ground floor should fetch 2.5 to 3.0 lacs per year (Indicative range)rent

Note 1: Not added common assets like basements, generators, furnitures etc

Note 2: One basic method of valuation is used here। There are many other methods, but not suitable for group housing walled colony।

Note: if plots were on free hold, prices would be 9 lacs more than this ।

No flat in shipra of any size has even land value less than 48 lacs।

Hence no flat of even 80 sq meter would be less than 55 lacs

The speculative element is not taken।The prices will only go up now.

If market prices are low it means poor maintenance or management of assets।

Offensive environment

Recession

Poor hygiene , encroachments and property mafia operating।

Disclosure: Author is resident here and hence has access to relevant details।It is an attempt to illustrate valuation concept by ground up approach, starting with land share value।

#flat Valuation

#apartment valuation

#group housing

#Dr R K Gupta

# property valuation method