Mr. John Moran:

It could be either. Without being flippant, obviously when somebody buys for a price in excess of the valuation price, they see something significant in the property that is more valuable to them than perhaps anybody else in the marketplace. It can happen particularly with land value. Perhaps people assume buildings can be constructed on the site at a higher density than one assumed in the valuation. Perhaps they have assumed a lower building cost than the valuer has assumed. Land value per seis volatile and can move around with investment value. One would be disappointed if one’s valuations were being exceeded all the time in sales.

One thing that is important to understand, though, is that valuation is backwards looking; it is not forward looking. Values are based on the most recent previous evidence. Therefore, if a buyer wants to make a market by paying more, he is entitled to do so. It is vitally important that it be understood that we are not market makers.