Urban Keys: Are Property Valuations in Cyprus Important?

Did you know that Property Valuations are critical, especially when considering making an investment?

At a glance, knowing the value of your property, you’ll be able to charge rent accurately, know how much taxes you’re paying every month as well as you get to know your return on your investment.

Now that you got the main gist of the key uses of property valuations, let us dive into some more details regarding this matter.

As you may have noticed, the real estate market in Cyprus has been trending over the last years and still performing well, with real estate companies, developers and construction companies pushing the boundaries to keep up with the continuous demand and of course their competitors. And this does not stop here… Property Valuations in Cyprus are now more important than ever.

Following the challenging times, the property market is facing it seems that is transforming fast with different types of properties expected to change hands. Some property types will lose value and some others will gain in the contrary. It is therefore essential now a days to value the property regularly (6 months) so you can more effectively and efficiently to monitor the real estate market.

But what does this term really mean?

Well, the term is pretty simple to understand. Just like the name implies, property Valuation is the process of finding out the Market Value of a property, whether this property is a residential or a commercial, land, etc.

This procedure is executed by a professional in the field, where through his experience they will be able to calculate the value of the property and then present the final valuation in a detailed report.

To obtain accurate property value when selling and buying, property valuations must always consider the crucial determining factors of macro market conditions and trends, property-building specs, and exact property location. At the same time, property price comparisons and benchmarking are a primary tool for defining and verifying values according to each property market, property type and property location.

So, why are Property Valuations important?

There Are two answers actually!

A simple one and a more “in-depth” which will answer the question of “Who needs a property valuation?”

The simple answer would be “Because it helps in finding out the actual value of the property”.

And here comes the more elaborative answer.

There are a lot of advantages to knowing the correct Market Value of your property.

To start with, you will be able to get to know the Market Value of the property which enables you to place your property in the open Market at the right price (and more importantly at the right time) whenever you decide to sell.

Secondly you will know the right amount of loan required by the bank (if you are considering buying a property through a loan).

Thirdly, organisations will be able to provide banks with precise reports for the fiscal month/year.

Last but not least, rental valuations are also necessary mandate to estimate the correct rent to rent your property or in case you want to rent yourself a property and you will need to know how much to offer.

Property Valuations are prepared for many other purposes such as rental disputes Selling/buying, Balance sheet Valuations, Sales Tax Valuations, Legal/Judgement Purposes, Portfolio Analysis and many more.

Owning a property or portfolio of properties at these challenging times we are facing, is difficult and indeed valuation of your asset is the most important element before selling or buying a property. Probably this will be the biggest investment you have made so far therefore the cost for the preparation of the report compared with to the investment is minimal while the benefit having the report on your hand is of great value.

The Property Surveyor will assess the way the property was built, its size and location and its overall condition. Using their experience and technical training, they will evaluate the property and how it can be compared to similar properties that have been recently sold nearby. The use of evidence during these assessments will be carefully documented so that it is clear how the surveyor arrived at their valuation.

The surveyor will also note down any assumptions they made and any limitations to their valuation. Property Surveyor’s valuations reports reflect a fair and accurate Market Value that a willing buyer and purchaser would both accept under normal market conditions.

Surveyors are accountable for their valuation – they must provide detailed evidence showing how they have come up with their values (comparable). Any person or business that owns, develops, or occupies a property relies on a property Surveyor expertise in order to make informed decisions.

But what is the difference between a market estimation prepared by an agent and a proper valuation report prepared by experts and qualified valuers which are also members of the Royal institution of Chartered Surveyors MRICS?

Simply put, only an accredited, qualified valuer can provide formal valuations that can be relied on by financial institutions, lenders, private individuals, funds, property companies and the public sector. Complex valuations require extensive knowledge and skills to ensure that all features and issues relating to a particular property are covered and acknowledged in the final figure.

Market estimation, such as those offered by local agents, are estimates and are only intended as an informal guide to pricing. Estate agents offer appraisals estimated by knowledge of the local area and recent sale prices; they should only ever be used as guide price and have no legal standing.

Property Valuers in Cyprus are highly educated and hold a BSc or BA degrees in the Real Estate Sector as well as postgraduate degrees. The majority are Chartered Surveyors and operate in accordance with the RICS Appraisal and Valuation Manual (Red Book) which is now incorporated with the International Valuation Standards (IVS). Apart from being members of the RICS, Property Valuers must be registered with the Cyprus Scientific and Technical Chamber (ETEK), which is the official body that regulates the profession in Cyprus. Property Valuers are obligated to hold Professional Indemnity Insurance and are bound both by the professional ethics and professional conduct regulations.

In addition, Property Valuers in Cyprus are also members of the Cyprus Property Association of Approved Valuers (ΣΕΕΑΚ) which main objectives include the provision of an organizational framework for all professional property valuers. The association support the promotion and interests of the real estate profession, safeguarding the reputation of the profession as well as provide continuous professional development and updating of the members on key issues relevant to property matters.

So, as we sum up, we hope you got an idea (well maybe a bit more than just an idea) on why Property Valuations and in general are important as well as what qualifications you should looking before choosing one! More information about Property Valuations can be found in the Cyprus Property Valuers Association where most of the qualified property Valuers and Chartered Surveyors are members and you can find their details.

Lambros Kaloyirou BSc (Hons) MRICS .

Urban Keys Chartered Surveyors Ltd .

www.urban-keys.com.

70, 28TH October Ave 2414, Nicosia, Cyprus.

Telephone: +357 22 27 00 19 .

E-mail: [email protected].