Hi, On page 13 of chapter 9, under the heading "Spread" it says the following: Capital values of buildings can be more volatile over the longer term, although infrequent valuations and a stable valuation methods reduce short term volatility I'm struggling to follow how infrequent valuations combined with stable valuation methods reduce short term vol. Thanks, Darragh
Hi Darragh Regarding the infrequent valuations point, something can only be volatile (value of it moving up and down a lot) if you can show it being volatile. If valuations are infrequent, volatility in the short term is less possible as you won't have the regular valuations needed for volatility to exist. Stable valuation methods are ones that give values that vary less over time, and so show less volatility. Market values are often the most volatile way of valuing something so using other methods than current market value, as is often necessary for property in the absence of regular readily available market values, will reduce the volatility experienced. Hopefully this helps.
