Discount rates used for forest valuation - results of 2017 survey (2018)

View/ Open
Type of Content
Journal ArticleISSN
1174-7986Collections
Abstract
A total of 23 forest valuers responded to the survey and provided information on 19 New Zealand and eight Australian transactions in 2016 and 2017. The average reported implied discount rate (IDR) for New Zealand transactions is 7.0% (range 4.0% to 9.2%) for current rotation post-tax cashflows and 7.6% (range 4.0% to 10.7%) for pre-tax cashflows, compared to 6.9% and 8.6% in the 2015 survey. IDRs for the four transactions of medium or large forests are, on average, lower than for the 15 small forests; 5.8% versus 7.2% for post-tax cashflows and 5.9% versus 8.4% for pre-tax cashflows. The eight reported Australian transactions are all medium or large forests. For current rotation pre-tax cashflows the range of IDRs is 7.7 to 10.8% with an average of 8.5%. Forest valuers provided the discount rate they use to estimate the market value of a forest. Valuers apply a discount rate in the range 6% to 10% (average 7.1%) to post-tax cashflows or a discount rate also in the range 6% to 10% (average 7.6%) to pre-tax cashflows. Fourteen of the 23 valuers included in the 2017 survey also participated in the 2015 survey. They are using discount rates for forest valuation that are, on average, 0.6% lower than in 2015. Although eight of these valuers are using a lower discount rate, the other six use the same, or higher, average discount rates in 2017 as they did in 2015.
Citation
Manley B (2018). Discount rates used for forest valuation - results of 2017 survey. New Zealand Journal of Forestry. 63(2). 35-43.This citation is automatically generated and may be unreliable. Use as a guide only.
ANZSRC Fields of Research
30 - Agricultural, veterinary and food sciences::3007 - Forestry sciencesRights
All rights reserved unless otherwise statedCopyright NZ Journal of Forestry
Related items
Showing items related by title, author, creator and subject.
-
Discount rates used for forest valuation - results of 2021 survey
Manley, Bruce (2022)A total of 23 forest valuers responded to the survey and provided information on 25 New Zealand and four Australian transactions in 2020 and 2021. The average reported implied discount rate (IDR) for the New Zealand ... -
Discount rates used for forest valuation - results of 2015 survey
Manley BR (2016)Sixteen forest valuers responded to the survey and provided information on 36 New Zealand transactions between mid-2013 and 2015. The average reported implied discount rate (IDR) for the New Zealand transactions ... -
Discount rates used for forest valuation - results of 2013 survey
Manley B (2014)Sixteen forest valuers responded to the survey and provided information on 28 New Zealand and four Australian transactions between mid-2011 and 2013. The average reported implied discount rate (IDR) for the New Zealand ...