date: 28 april 2010
duration: 2.5 hours
instructions: answer all questions
(1) In spite of the problems inherent in the mandatory application of the "three approaches" to valuations in the US, the rationale behind it (i.e. forcing valuers to account for every conceivable factor affecting property value) is very appealing. How significant is the "three approaches" to the valuation of real property in Singapore? (20 marks)
(2) A property speculator who has made a fortune in property speculation told a business colleague that he (the property speculato) never pruchases a property unless he can buy it for a less than what it is worth. What are the implications of the concepts of value implied in this statemen? (10 marks)
(3) The use of sales data for property valuation presumes that the future is a prisoner of the past. Discuss the challenge(s) that this presumption pose(s) to valuers. (20 marks)
(4) Table 1 shows the tender results for the 99-year leasehold residential site at Serangoon Ave 3. The site has a land area of 13,877 m2 with a gross floor of 38,857 m2. Explain the reasons for the different prices tendered by the developers.
The table will not be shown here. Total of 15 tenderer took place ranging from $120,000,000 to $221,207,207 tendered price. (25 marks)
(5) Mr. Jonathan owns a factory cum showroom along Upper Paya Lebar Road. The space comprises a two-storey building with an interal floor area of 4,000 m2 per floor. The reinstatement costs for the factory and showroom are $2000 per m2 and $1,800 per m2 respectively. The showroom space of 3,000 m2 internal floor area is rented to Junion Furniture at a monthly rental of $40 per m2. Mr. Jonathan is interested to value the property for fire insurance prupose. Making relevant assumptions, value the factory cum showroom for fire insurance purpose. (25 marks)
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