
Real estate sales: What exactly is the standard land value?
The standard land value is determined by a regional committee of experts. The experts look at the sales prices of undeveloped land over the last two years and use this information to determine a value. Different standards are applied depending on the municipality. While Berlin clusters properties according to location classes, the expert committee in Hamburg determines an average value for each district. The planned or existing development is also a decisive factor. Among other things, the number of floors, the type of use, and whether it is an apartment building or a single-family or two-family house may be relevant here.
The results are published on standard land value maps and in tables. The current values must be published at least every two years in a market report.
The standard land value is not the market value
However, anyone wishing to sell a property cannot rely solely on the standard land value when determining its value. This is because every property has its own unique characteristics. The standard land value, on the other hand, is intended to create comparability. It is composed of the average values of past sales and is usually expressed as a price range. It is therefore an important basis for the final asking price in a professional valuation, but cannot replace it.
The standard land value is also an important basis for calculating the value of buildings. In the asset value method, for example, the property value is divided into the land value and the asset value, i.e., the value of the building's construction costs.
The standard land value in dynamic markets
Since last year's property prices form the basis for determining the standard land value, it should be treated with caution, especially in very dynamic markets. This is because in cities such as Berlin or Munich, real estate prices are rising by an average of around ten percent annually. The standard land value is therefore sometimes already out of date by the end of the year. For this reason, market reports containing standard land values in large cities are often published every year rather than every two years, as required by law.
A local professional real estate agent knows the price trends in the local real estate market and can therefore determine the value of a property in line with the market. Would you like to know how much your property is currently worth? Contact us now. We will be happy to advise you.
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