How does land condition affect property values?
By Ian McLean THE answer to this question depends a lot on how you define ‘value’. We are referring primarily to the intrinsic economic value of a property, as opposed to the value placed on it by the market. A previous article on ‘Beef land vs. Gold’ discusses different approaches to valuation. The intrinsic economic value of an asset is essentially its value based on its future earning capacity, which means that land condition has a big effect. There are four categories of land condition recognised in northern Australia: ‘A’ for good condition, ‘B’ for fair, ‘C’ for poor and ‘D’ for very poor. This report-card style classification is determined by the health and functioning of the pasture and soil components of the area being assessed. Land in poor (‘C’) condition…
