elements under the national standard are:
development is a method of valuation used to value land suitable for
development. For example, to find the value of in globo (or en
globo) land or the value of a commercial site suitable for
redevelopment. In globo and en globo means the same
thing; land suitable far subdivision. In globo residential
land is also known as accommodation land or greenfields
or paddock value.
value in this context refers to development land that has obsolete
structures on it. That is, the developer will demolish the existing
structures and develop the land to a higher and better use. The term
is commonly used in relation to commercial development land. Because
the buildings cannot be economically converted to the highest and
best use they have no value. That is, demolition value only as
they will be demolished by the developer. This principle was
enunciated in Horn's case with regard to the value of rural
improvements on land suitable for subdivision:
can only realize the building value in the market if he is willing to
abandon his farming business in order to obtain the higher price. If
he claims compensation for disturbance of his farming business, he is
saying that he is not willing to abandon his farming business; that
is, that he ought to be treated as a man who, but for the compulsory
purchase, would have continued to farm the land, and, therefore,
could not have realized the building value p399.
only way in which he could realize the building value was by giving
up farming on the land; the only way in which he could enjoy the
farming value was by refraining from realizing its building value. By
farming on building land he was, economically speaking, indulging an
idiosyncrasy without any economic justification. By claiming for
disturbance he is asking to be compensated not for any real pecuniary
damage, but for the loss of the opportunity to indulge his
idiosyncrasy Horn v Sunderland Corporation (1941) 1 All ER
480, The Valuer, October, 1941,397 at p401.
direct comparison method is the primary valuation method if
sufficient comparable land or site sales are available. However, this
ideal situation does not occur very often and therefore, the
hypothetical development method is the preferred method. Summation is
not used as ultimately, the value of development land depends on
utility. That is, value is a function of how large a building(s),
home units or lots can be erected or subdivided on the land.
development is a useful initial method in feasibility studies.
However, because it uses "rules of thumb" to determine the
amount of interest lost during development period, it is not a
reliable method where the competing uses show about the same land
there is a need to "fine tune" the valuation, the
discounted cash flow (DCF) (see Appraisal Two) method is preferred.
However, where there are a number of competing uses over the land
showing a marked difference (for example, all but one are obviously
uneconomical) then the hypothetical development method is a reliable
method and has the advantage of being sanctioned by the courts.
DEVELOPMENT OF THE LAND
development is the notional or "paper" development of land.
It applies established methods of valuation to the proposed building
or subdivision to determine land value. This is carried out for a
number of allowable competing land uses. The use that generates the
highest land value after an appropriate allowance for profit and risk
and the deduction of costs of development, is the highest and best
use of the site.
following are six subdivisions that have shown innovation and flair
in their development. The studies show how the density of residential
subdivisions can be increased using density development and/or
of development are included except for Kingswood Park and compared to
the cost of traditional developments.
outcomes of analysis
- analyse data on
subject development property
- record value,
analytical approaches used and qualifications required.
- NALYA ROAD – NARRAWEENA
- MT LEWIS ESTATE –
- GOORGOOL ROAD – BANGOR
- GREEN LAND – BRADBURY
- BUDGINIGI PLACE – ST
JOHN’S HILL ALBURY
v Comm of Aust (1976) 12 ALR 201
Settlement/Decentralizaflon v Minister (1942)17 LGR 62
Playing Fields v VG (1936)4 The Valuer 246.
Ltd v Minister (1942) 7 The Valuer 134
v Minister (1964)18 The Valuer 579
v Sunderland Corporation  1 All ER 480
& Anor v Minister (1956) 95 CLR 245
- FOX PLACE – KINGSWOOD