The three valuation methods, when each applies, and why three different numbers exist for one property.
Property is valued using three main approaches: the comparable sales method, which uses recent registered transactions for similar properties and is the primary method for residential property; the income approach, which capitalises achievable net rent at an appropriate yield and is used for tenanted commercial assets; and the cost approach, which values land plus depreciated construction cost and is used where comparables are scarce.
For any given property there are usually at least three different figures in circulation: what the seller is asking, what comparable properties actually sold for, and the government jantri rate used for stamp duty. They are not the same thing and they are not meant to be.
Understanding which figure applies to which purpose resolves most pricing disagreements before they start.
This is the primary method for residential property. It works by identifying recent registered transactions for similar properties in the same building or micro-market, then adjusting for the differences between those properties and the one being valued.
The adjustments are where the skill sits. Floor level, facing, age, condition, parking, amenities, and actual carpet area against quoted area all move value within the same building, sometimes substantially.
Used where a property produces income, principally tenanted commercial assets. It works by establishing achievable net operating income — rent less operating costs — and capitalising it at a yield appropriate to the asset, its tenant and the remaining lease term.
A property let to a strong tenant on a long lease is worth more than an identical vacant unit, because the income is more certain. The yield applied reflects that certainty.
Used where comparables are scarce or the property is unusual — a distinctive villa, a purpose-built industrial facility, an institutional property. It values the land at its market rate and adds the depreciated cost of replacing the structure.
It is a cross-check more often than a primary method for ordinary property, because what something cost to build and what someone will pay for it can diverge considerably.
The jantri or circle rate is a government-notified minimum used as a floor for stamp duty assessment. It is a tax reference point, revised periodically, and it can lag actual market movement in either direction.
It is not a valuation and should not be used as one, though it does set the minimum value on which stamp duty is payable regardless of what you negotiate.
Buyers often assume units in one building are broadly interchangeable at a per-square-foot rate. In practice the spread can be wide.
A useful valuation compares recent registered sales for similar carpet area, age, parking and society quality in the same locality — not asking prices from online listings alone.
Bodakdev, Sindhubhavan Road and neighbouring western pockets can price differently for the same configuration; evidence should match the exact micro-market of the asset.
For residential property with an active market, the comparable sales method is the most reliable because it reflects what buyers actually paid. For tenanted commercial assets, the income approach is more meaningful because the value derives from the income stream. Where the two diverge materially on the same asset, that divergence is itself informative and should be explained rather than averaged away.
Asking prices include negotiating margin and often reflect what the seller hopes for or needs rather than what the market supports. A valuation based on registered transactions tells you what comparable buyers actually paid, which is the more useful number for deciding what to offer.
For a purchase or sale decision, at the time of the decision — a valuation from a year ago may not reflect current conditions. For portfolio monitoring, annual review is usually adequate unless there has been a significant change in the corridor, such as a major infrastructure completion or a jantri revision.
Online estimates can give you a rough range but they rely on aggregated data rather than on registered comparables from your specific building, and they cannot adjust for floor, facing, condition or carpet area. They are useful for orientation and unreliable for a decision that involves committing money.
We prepare written valuations supported by registered comparables — for purchase, sale, settlement or dispute.