Hi Guys,
We signed our Contract of Sale for an unregistered land at Stage 5 Beaumont Rise valued by the bank at the full purchase price at $347K in October 2009 and settled in May 2010 when it finally got registered.
We are in the process of finalising our Construction Loan and just a bit concern how the valuation is going to turn out. I was told that the valuer looks at the value of the land and the construction costs and comes up with a “As If Completed” valuation amount. During our recent visit at the site, according to the new Sales Manager, blocks / land similar to ours on Stage 3 are now selling from $390K to low $400k and these are on the lower section of the estate. Which means we already have capital gains on the land.
Is there any reason for me to worry about the construction cost being under-valued? Considering average existing 2 storey houses in the area are selling to high $300K.
Given the capital gains on the land, would our LVR reduce significantly as well as our LMI?