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2006, Journal of Building Appraisal
She is a chartered valuation surveyor and has worked in academia for over 25 years. She has researched and written papers on the mutual recognition of professional qualifications within Europe, and on rating and land taxation. She has supervised PhD research into residential issues, among others. She is the RICS delegate to FIG's Commission 2 (Professional Education), a member of the editorial board of Journal of Tax Assessment & Administration and is the Editor of Property Management.
Journal of Property Research, 2020
The aim of this paper was to compare valuation accuracy of eight European markets, using the same time period, data source and methodology. The emphasis was placed on the accuracy of held properties because previous studies showed that sold properties tend to be valued closer to the market. Real sales data was used to derive hedonic sale prices. The Heckman correction was employed to correct for sample selection bias. A comparison of simple differences between actual valuations and fitted prices showed that valuations were on average below fitted prices in all countries except the Netherlands, indicating a possible overvaluation problem of held properties in Europe. A comparison of the absolute difference showed that the Netherlands and Switzerland displayed the highest valuation accuracy. Italy and Sweden on the other hand were the markets with the lowest median valuation accuracy and largest spreads of observations. All countries, except Sweden, had a majority of observations within an absolute difference of 20%. The two most interesting conclusions from the analysis were that Germany and Switzerland did not differ significantly from other markets in terms of valuation accuracy and that Sweden was consistently the market with the lowest valuation accuracy.
FIG Working Week, 2005
Journal of Housing Economics, 2020
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Property Management, 2019
Purpose-Improving valuation accuracy, especially for sale and acquisition purposes, remains one of the key targets of the global real estate research agenda. Among other recommendations, it has been argued that the use of technology-based advanced valuation methods can help to narrow the gap between asset valuations and actual sale prices. The purpose of this paper is to investigate the property valuation methods being adopted by Australian valuers and the factors influencing their level of awareness and adoption of the methods. Design/methodology/approach-An online questionnaire survey was conducted to elicit information from valuers practising in Australia. They were asked to indicate their level of awareness and adoption of the different property valuation methods. Their response was analysed using frequency distribution, χ 2 test and mean score ranking. Findings-The results show that the traditional methods of valuation, namely, comparative, investment and residual, are the most adopted methods by the Australian valuers, while advanced valuation methods are seldom applied in practice. The results confirm that professional bodies, sector of practice and educational institutions are the three most important drivers of awareness and adoption of the advanced valuation methods. Practical implications-There is a need for all the property valuation stakeholders to synergise and transform the property valuation practice in a bid to promote the awareness and adoption of advanced valuation methods, (e.g. hedonic pricing model, artificial neural network, expert system, fuzzy logic system, etc.) among valuers. These are all technology-based methods to improve the efficiency in the prediction process, and the valuer still needs to input reliable transaction data into the systems. Originality/value-This study provides a fresh and most recent insight into the current property valuation methods adopted in practice by valuers practising in Australia. It identifies that the advanced valuation methods could supplement the traditional valuation methods to achieve good practice standard for improving the professional valuation practice in Australia so that the valuation profession can meet the industry's expectations.
SUMMARY Immovable property valuation is performed by public sector actors for several land management activities, such as property taxation, expropriation or compulsory purchase of land, land readjustment and land consolidation; and private sector actors perform valuation for purchase, real estate financing, investment analysis, and further property transactions. The valuation process returns estimated value (e.g. market value) of property units based on their legal, physical, geographic, economic, and environmental characteristics, as recorded at public registries or observed on location. The ISO 19152:2012 Land Administration Domain Model (LADM) presents a conceptual schema for the specification of property units and their legal and geometric characteristics recorded at cadaster and land register, and relates these datasets with other property related datasets (e.g., valuation, taxation, land use, land cover) recorded at external databases. A recently initiated collaborative research (see Çağdaş, 2016) aims at developing a data model for one of these external databases, in terms of a Valuation Module for the ISO 19152:2012 LADM which is supposed to define semantics of valuation databases maintained by public authorities especially for immovable property taxation. The present paper presents preliminary results of this initiative, and describes a draft version of the Valuation Module which specifies the input and output data used and produced when single or mass appraisal processes are performed according to published standards and recommendations. It also presents a questionnaire which was prepared to create an inventory of valuation applications all over the world, and will be used as source data for the elaboration of the draft module. The paper also opens a discussion about this initiative, and calls for contributions of other relevant bodies (e.g. FIG, OGC, TEGOVA, IVSC and IAAO) for the further development of the draft Valuation Module.
1997
This paper is the first of two which aim to examine the major legal liability implications of changes to the commercial property loan valuation process caused by the recession in the UK property market and to make recommendations to valuers and their professional institutions to improve the quality of the process and the result. This paper identifies the market background to commercial property lending and discusses the implications of the falls in value for lenders and valuers. These include two major strands; first, the outcome of discussions between the representative bodies of these two groups and, second, the increasing litigation caused by lenders suing valuers for professional negligence. The discussions between representative groups have driven a debate on the valuation process leading to a number of reports and guidance notes. This paper discusses the outcomes paying particular attention to the basis of valuation for loan purposes and the provision of additional information in valuation reports. This paper also reviews the legal framework which influences the relationship between the lenders and valuers and discusses the duty of care. The role of instructions in the valuation process, the significance of the identity of the person to be advised and the possibility of a conflict of interest arising are all considered. The paper also addresses the issue of the standards required of a commercial loan valuer, including how this is interpreted by the courts and the legal status of professional guidance notes.
Journal of Property Investment & Finance, 2002
2007
This paper provides a first order approximation of the accuracy of commercial property valuations for comparison with the ±5-10% threshold of tradition, convention and judicial acceptance. The nature of ranges is considered in relation to the uniform and normal probability density functions and the effects of bias considered. Summary statistics are examined for gross differences (differences between property valuations and subsequently realised transaction prices) recorded in the Investment Property Databank (IPD) database and significant yearly changes noted in both the means and standard deviations. A meta analysis of previous work is presented which shows all other results involving gross differences (GDs) to be reasonably consistent with statistics yielded by the IPD database. The results for the two main studies of net differences (GDs adjusted for the lag in time between valuation and transaction dates) also suggest yearly trends of a similar nature to the GDs. The role of int...
2015
About 70% of land ownership units in developing countries are not formally registered and land registration is not achieving the desired results. At the same time, and while still recognising there are needs for such top-down initiatives, UN-HABITAT/GLTN is looking towards facilitating an evolutionary approach towards market development by the use of valuers. UN-HABITAT/GLTN considers the valuation of unregistered land may be necessary: 1. in situations of urban expansion into unregistered peri-urban sprawl 2. developments including infrastructure projects entailing compensation 3. upgrading of informal settlements 4. investments in improved farming resettlement initiativeseven disaster related resettlements, redressing historical displacements, and 5. individual ownersmostly from disadvantaged groups-needing to borrow against their land or do share-cropping or sub-leasing of their land due to socioeconomic pressures, etc. This paper is a progress report on facilitating the valuation of unregistered lands. In so doing, UN-HABITAT/GLTN is looking towards not only a bottom-up approach, but also one that also addresses all the relevant socioeconomic and institutional scales between the top and the bottom, so that both valuations and property markets in unregistered lands can be addressed in a "fit for the purpose" market-specific manner.
A good number of researchers have questioned the reliability of some commercial (and residential) valuations as well as the integrity of the valuers involved. The root cause of these criticisms is the combined effect of high degrees of valuation variance attributed to valuers' biases and valuers' heavy reliance on their store of prior knowledge and experience during the valuation process, the latter becoming the dominant factor in the valuation of the subject property. While the author shares these sentiments, he nevertheless argues that the way forward is valuers becoming sensitized to the huge negative impact that valuation variance exerts on their coveted profession, as public interest specialists, and then being proactively willing and ready to shift their allegiance away from obsolete valuation methodologies to those that are overtly rational, dynamic and market-supportive, such as the 'Comparison Grid' that is extensively used in North America. The purpose of this paper is to demonstrate how this can be achieved in practice. In terms of methodology, the author applied his 30-years' practical experience in both the private and public sectors in sub-Saharan Africa, England and Canada to critically reflect on valuation literature, practices and methodologies across these regions. This strategy was feasible because all the countries in which the author had gained field experience operate a legal system that is founded on the British colonial legal system. Using the nexus between 'market fundamentalism' and 'rationality', the author presents a case study and demonstrates how professional valuers should be doing their job in these times of global recession. This is followed by a set of recommendations that have the potential to improve valuation practice and enhance valuers' integrity. Key words: Paradigm shifts, real property, valuation methodologies, market determinism, rationality.
For many years, internationally recognised standard setting bodies have sought to harmonise property valuation standards across the world. In this they have had some measure of success in standardising bases of value and definitions. In particular, there is now a universally accepted definition of Market Value as set out in International, European and RICS Valuation Standards and as also enshrined in EU Directive 2006/48/EC, known as the Capital Requirements Directive. Unfortunately the interpretation of the common definition of Market Value differs from country to country. Following the publication by The European Group of Valuers' Associations (TEGoVA) of a new edition of European Valuation Standards (EVS 2012), a clear difference has emerged between the interpretation of Market Value in North America and Europe. Valuers in the former are heavily dependant on highest and best use analysis whereas in Europe a less restrictive approach permitting the reflection of hope value is preferred. Such differences in the interpretation of market value will in turn impinge on the assessment of Fair Value for financial reporting purposes. Whereas in the case of property valuation, Fair Value is taken to be the same as Market Value for Highest and Best Use, under EVS 2012, the Fair Value of a property could differ substantially, from its Market Value. This paper seeks to explain the worldwide differences in the interpretation of the definitions of Market and Fair Value. In addition, it draws attention to two different meanings of the term Fair Value depending on whether the valuation is for financial reporting purposes or where there is a need to estimate the price that would be fair in a transaction between two specifically identified parties, where special value or synergistic value may influence the price agreed between them.The author concludes with lessons to be drawn by the valuation profession and property owners in Poland. In particular he suggests that the Polish Topical issues in the valuation and application of market value 10 Topical issues in the valuation and application of market value
2014
SUMMARY The ownership of real property is protected by the constitution in most countries. However,in most cases the “public” has reserved a right to limit the constitutional protection of propertywhen it is necessary for the public good. In Finland compulsory acquisitions are allowed for public interest with full compensation. Compensation shall ensure that the affected party’s financial position is not weakened in the process of compulsory purchase. In the FIG recommendations market value is stated to be the basis of value for the assessment of compensation. The applicability of the market value as a basis of value for compensation has been criticized by stating that the use of market value leads systematically to too low values. This seems to justify a use of certain margin of safety which is the question that will be illuminated in this article.The study analyses the variation in property valuations which is estimated by giving the same valuation task to different property value...
Real Estate Management and Valuation, 2014
The objective of the study is to try and identify the reasons for the detachment of the valuation practice from its methodology. Two methods have been used in the paper: the analysis method and the case study method, under which fourteen property valuation reports posted on websites and two opinions about the property valuation prepared for court purposes in order to detect and identify sources of deviations from the valuation methodology have been analyzed. The study, besides theoretical aspects, includes references to practical application: pointing out directions of changes in legal regulations and national valuation principles, which should help achieve uniformity in interpreting the valuation concept, allowing the reduction of its uncertainty, understood as the uncertainty of a single valuation and uncertainty as the difference between valuations.
Journal of Property Research, 2012
This paper is concerned with assessing how valuations for mortgage purposes reflect market evidence. Differences between the value obtained through the analysis of comparables and the final assigned value are analysed. The study is undertaken for the Spanish housing market at the peak of the house price boom. High levels of accuracy are apparent but with a tendency to over-rather than undervalue properties. Physical housing variables are shown to have a relatively homogeneous effect, whereas factors relating to the environment and location lead to wider differences between valuations. The effect of characteristics is shown to vary substantially between cities. There is no evidence from the analysis that the property bubble in Spain was driven by inaccuracy in valuations.
2021
Due to the special attributes of real estate as an asset class, property values are not readily observable on the market and therefore the industry depends heavily on valuations to estimate the value of a property at a specific moment in time. The ability of valuations to accurately mirror market values is therefore of vital importance. This collection of papers summarizes the analyses of different aspects of property valuations in Germany that may contribute to the observed stability of German property values in comparison to other countries. The analyses included a Market-Adjusted Valuation and Actual Sale Price Comparison, based on sold properties, and an Actual Valuation and Fitted Sale Price Comparison, based on held properties. The Heckman Correction was used to reduce the impact of sample selection bias in the transaction regressions. The first analysis compared the German Income Approach (GIA) with valuations according to the Discounted Cash Flow (DCF) approach. The results ...
2017
Improving processes for valuing properties lies at the heart of efforts to improve the overall effectiveness of property taxation. Effective property taxation is impossible without efficient property valuation. In practice, however, valuation rolls across most of Africa are incomplete and severely out-of-date, thus dramatically reducing potential property tax yield. This is, at least in part, a function of history: many of the valuation models being used on the continent do not reflect best practices and local learning, but are inherited vestiges of colonial systems that no longer respond adequately to local needs. The need to modernise is urgent, but progress has been slow. Effective reform needs to consider two broad questions: (i) the extent to which market value or physical attributes of the property should be the basis for valuation; and (ii) which organ of government should be responsible for valuation, and how should it be organised? Answers to these questions may vary across...
emselts.ee
During the past few years there have been many changes in financial reporting rules in EU countries. One significant change from the real estate point of view has taken place in balance sheet, where property investment account is switched to the asset side of the balance sheet, separate from the property, plant and equipment. Since 2005, all companies listed in the stock market, have the obligation to apply International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) in their everyday practice. At the same time, more and more researchers have pointed to the problem of valuation accuracy and to the uncertainty of the valuation product.
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