If rents are relatively stable and land prices reflect rental values , why land prices are unstable One obvious reason is interest rates. Land prices are very sensitive to fluctuations in interest rates since mostland transactions are financed by borrowing valuation of land This is not only real interest rate movements that are relevant here, but the expectation of interest rate changes. Land prices are also subject to speculative valuation surges. When they themselves of access, land prices can drop dramatically. It would be inappropriate to import into this super position frothy based assessment LVT. It would be a mistake,therefore, based on capital values LVT. Annual rental values alone can meet the requirements necessary for the stability and equity in valuation of land
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