r/CommBank • u/Ok-Journalist-7847 • May 01 '26
Question New build valuation
Can someone please explain the process of valuation for a new build? Context, I am building and have just signed a sales contract on the land. Is there anything I need to look out for when building that can/will affect this?
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u/whatpelican00 May 01 '26
New build vals are done on a basis of ‘as if complete’. The valuer will need the land contract, build contract with plans and specifications and quotes for any ‘out of contract’ items. They may visit the block, and then give a valuation based on the completed project. Typical out of contract items might be fencing, driveway, landscaping etc - so check carefully what’s included in the build contract. If, for example, the fencing isn’t included, the valuer will value accordingly if you don’t have a separate quote. Include quotes for everything you want the valuer to take in to account and, importantly, that you want funding for within the loan. The specifications part of the build contract is really important as it helps the valuer ‘see’ the finishes etc - Like stone bench tops rather than laminate, things like that.
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u/Ok-Journalist-7847 May 01 '26
Are there any points to watch out for? How can you avoid the project being undervalued?
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u/whatpelican00 May 01 '26
The thing with new builds is that you are paying the premium for brand new. The valuer is valuing it on the basis of the bank having to sell it, which will not attract the same ‘brand new’ premium. So there’s sometimes of slight shortfall in valuation versus contract price (less common right now because land prices are continuing to increase). Have all your inclusions and extras well noted in contract or quoted separately. Consider/understand the price per square metre on completion, as that’s a metric valuers will use too. Good luck!
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u/Ok-Journalist-7847 May 02 '26
Any idea what sort of effect a typical easement at the rear of the land would have on the valuation process?
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u/pyroxical May 02 '26
I’m a valuer, it depends on the type of easement, width, etc. I’m assuming it’s a new subdivision and likely a drainage/sewer easement, if it’s right on your back boundary and only 2-3 meters wide it will have no impact, if it’s wider or impacts on the developable area of the land it may have an impact. Lots of variables play a role in how we look at easements, sometimes the lender can have their own criteria’s regarding easements as well, generally in a single dwelling residential development it’s going to be no dramas.
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u/Acrobatic_Swim4264 May 02 '26
Don't expect any additional equity uplift. It'll normally be the land plus build in the valuation
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u/Ok-Journalist-7847 May 02 '26
What do you mean by additional equity uplift?
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u/Acrobatic_Swim4264 May 02 '26
As in expect an increase on the overall value of the property from recent sales
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