Pricing to market: property valuation methods – a practical review

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Laura Gabrielli ◽  
Nick French
Keyword(s):  
Specific Property ◽  
Market Value ◽  
Content Type ◽  
Valuation Methods ◽  
Property Valuation ◽  
Valuation Method ◽  
Valuation Process ◽  
Valuation Task ◽  
The Right

PurposeValuation is the process of determining Market Value. Property valuation, as with the valuation of all assets, is an estimation of price in the market. It is value in exchange. The valuer role is to determine the appropriate approach, the method and use the right model to achieve this aim as best as possible. It is a combination of analysing the market and determining the critical variables for the valuation method/model. The method is separate from the valuation process which should be followed (according to the International Valuation Standards Council Valuation Standards) regardless the valuation method chosen. There are valuation approaches, valuation methods and, as a subset of the methods, techniques or models.Design/methodology/approachThis practice briefing is an overview of the Valuation Methods and Models available to the valuer and comments on the appropriateness of valuation each in assessing Market Value for specific property types.FindingsThis briefing is a review of the valuation methods and models and models that can be applied to determine market value.Practical implicationsThe role of the valuer in practice is to identify the method of valuation and then apply the correct mathematical model for the valuation task in hand.Originality/valueThis provides guidance on how valuations can be presented to the client in accordance with the International Valuation Standards.

Pricing to market: market value – the enigma of misunderstanding

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nick French ◽  
Neil Crosby ◽  
Chris Thorne
Keyword(s):  
Market Value ◽  
Property Market ◽  
Content Type ◽  
Market Participants ◽  
Valuation Process ◽  
Definition Of ◽  
The Right ◽  
Practical Implications ◽  
Is Value

PurposeMarket value is an estimation of price in the market. It is value in exchange. The valuer's role is to determine the appropriate approach, the method and use the right model to achieve this aim as best as possible. However, underpinning all valuations and property analysis are valuation standards and definitions. This paper looks at the definition of market value and how some market participants may misunderstand or even misrepresent it. This is particularly true when there is a downturn in the market.Design/methodology/approachThis practice briefing is an overview of the role of market value as a definition of price and how it is often misused by stakeholders in the property market.FindingsThis briefing is a review of the valuation definitions clarifying what they mean and what they do not mean.Practical implicationsThe role of the valuer in practice is to use the appropriate definition for the task in hand. The understanding of those definitions is central to the valuation process.Originality/valueThis provides guidance on how valuation definitions can be presented to the client in accordance with the International Valuation Standards.

Pricing to market

2018 ◽  
Vol 36 (4) ◽  
pp. 391-396 ◽  
Author(s):  
Nick French ◽  
Laura Gabrielli
Keyword(s):  
Market Value ◽  
Financial Economic ◽  
Content Type ◽  
World Markets ◽  
Valuation Task ◽  
The Subject ◽  
The Right ◽  
Market Valuations ◽  
Practical Implications

Purpose Since the global financial economic crisis hit the world markets in 2007/2008, the role of property valuation has been under greater and greater scrutiny. The process of valuation and its quality assurance has been addressed by the higher prominence of the International Valuation Standards Council (IVSC). This is a significant initiative worldwide. However, there has been little written on the appropriate use of valuation approaches and methods in market valuations. There is now a hierarchy of valuation definitions. In order, there are valuation approaches, valuation methods and, as a subset of the methods, techniques or models. The purpose of this paper is to look at the importance of identifying the appropriate approach to be adopted in market valuations and the methods, techniques and models that should be applied to determine market value. Design/methodology/approach This practice briefing is an overview of the valuation approaches, methods and models available to the valuer and comments on the appropriateness of valuation each in assessing market value. Findings This paper reviews the IVSC-recognised approaches and prompts the valuer to be careful with the semantics involved so that they are better placed to provide an unambiguous service to their clients. Practical implications The role of the valuer in practice is to identify the appropriate approach for the valuation of the subject property, choose the right method and then apply the correct mathematical model for the valuation task in hand. Originality/value This provides guidance on how valuations can be presented to the client in accordance with the International Valuation Standards.

Property valuation for mortgage purposes in Poland

2018 ◽  
Vol 36 (2) ◽  
pp. 234-247 ◽  
Author(s):  
Hanna Augustyniak ◽  
Jacek Laszek ◽  
Krzysztof Olszewski ◽  
Joanna Waszczuk
Keyword(s):  
Financial Stability ◽  
International Standards ◽  
Content Type ◽  
Polish Literature ◽  
Valuation Methods ◽  
Property Valuation ◽  
Reliable Source ◽  
Valuation Process ◽  
International Investors ◽  
Valuation Uncertainty

Purpose The purpose of this paper is to describe the property valuation methods that are applied in Poland. It shows that they base on international standards and are a reliable source of information for international investors and banks. Design/methodology/approach The valuation methods are described and critically assessed, potential problems are pointed out. The analysis of lending risk is analysed on data about non-performing loans (NPL). Findings Polish valuation methods are in line with international methods, but there are some risks, like small number of transactions, subjective behaviour of valuers. The low NPL ratios indicate that the valuation works correctly. Practical implications The Polish valuation methods are trustworthy, non-performing mortgage ratios are low, however, banks and investors should ask whether there is a local zoning plan. Moreover, they should look critically at the comparables that were used during the valuation process, if in their opinion the valuation is overly low or high. Originality/value This paper focusses on valuation from a financial stability perspective. It uses Polish literature and data on NPLs to give an insight on valuation of property and mortgage risk in Poland. Besides the review of the methods it points out the problems related to valuation uncertainty, such as the risk of subjective behaviour of valuers and the low number of transactions in some regions, which are used for valuations.

The categorization of expatriates and the support offered by host country nationals

2016 ◽  
Vol 4 (1) ◽  
pp. 18-43 ◽  
Author(s):  
Shirley C. Sonesh ◽  
Angelo S. DeNisi
Keyword(s):  
Host Country ◽  
Small Sample Size ◽  
Small Sample ◽  
Content Type ◽  
Host Country Nationals ◽  
Group Members ◽  
Expatriate Assignments ◽  
The Right ◽  
National Stereotypes

Purpose – Although several authors have suggested that host country nationals (HCNs) play an important role in the management of expatriates (e.g. Toh and DeNisi, 2003; Farh et al., 2010), research has also suggested that this relationship is not always good, and the flow of critical information to expatriates can be limited. This is especially true when HCNs categorize the expatriates as “out-group” members. The purpose of this paper is to examine potential determinants of categorization decisions as well as potential outcomes related to expatriate socialization. Design/methodology/approach – The paper employs a dyadic survey approach to determine the antecedents to expatriate categorization and HCN socialization behaviors from the perspective of both the expatriate and HCN. Findings – The results of survey data from 65 expatriate-HCN dyads indicated that expatriate ethnocentrism and the salience of the expatriates’ nationality were important predictors of categorization, but that categorization was related to only one dimension of socialization. However, affect was found to play a role in predicting socialization behaviors. Research limitations/implications – There is potential selection bias since expatriates chose HCNs as respondents, but results suggested this was not a serious problem. Other limitations include a relatively small sample size and the fact that a number of contextual issues such as national stereotypes and MNC strategy, are not controlled for. Practical implications – Implications of these findings for the successful management of expatriate assignments include sending over expatriates with the right relational skills, and those low in ethnocentrism, rather than just the right technical skills. Originality/value – The present study was one of the first to empirically test the potential role of categorization in the process of socialization.

Revitalising Waqf (endowment) lands for agribusiness: potentials of the anchor company models

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Norfaridah Ali Azizan ◽  
Amirul Afif Muhamat ◽  
Sharifah Faigah Syed Alwi ◽  
Husniyati Ali ◽  
Amalia Qistina Casteneda Abdullah
Keyword(s):  
Household Income ◽  
Design Methodology ◽  
Potential Role ◽  
Islamic Law ◽  
Living Condition ◽  
Previous Literature ◽  
Content Type ◽  
Muslim Countries ◽  
The Right

PurposeWaqf (endowment) lands constitute as among the highest types of waqf (endowment) properties in Malaysia; yet it is still unable to reach its maximum potential due to various challenges such as capital, location, legal and administrative issues. Therefore, this study intends to explore these issues by focussing on the two states in Malaysia (Selangor and Perak) that have fertile lands but different management authorities.Design/methodology/approachThere were series of interviews that had been conducted with ten (10) key informants who are experts and practitioners in the areas of Shariah (Islamic law), farming, agribusiness, land management and waqf.FindingsFindings exhibit that constraints and challenges that had been highlighted in the previous literature still exist (although some improvements had been made), but there is emerging theme that the study intends to highlight which is on the needs to secure market for the agribusiness produce and the potential role of anchor company in the agribusiness. It is pertinent that for agribusiness to thrive, selecting the right anchor company that has the capacity to address the challenges is necessary. This study posits two anchor company models (Waqf Trustee-Anchor Company and Waqf Trustee-Anchor Company-Community Farmers) that can be applied for agribusiness on the waqf lands.Research limitations/implicationsThis study is based on the Malaysia's context influenced by specific country's features. Nevertheless, such findings can still be used as reference or benchmark by other endowment trustees in other countries especially for the Muslim countries as well as the non-Muslim countries that have significant Muslim populations.Social implicationsThe suggested models have potentials to improve the living condition of the B40 (below 40% household income) in Malaysia because the models encourage their participation in the agribusiness activities.Originality/valueThis study focusses on the agribusiness, which is rarely being given attention in previous literature in the context of endowment lands. Therefore, this article bridges the literature gap and at the same time attempts to provide suggestion to address the pertinent issue – the underutilised endowment lands.

A Conceptual Model for Aligning IT Valuation Methods

2012 ◽  
pp. 182-201 ◽  
Author(s):  
J. Gilbert Silvius
Keyword(s):  
Conceptual Model ◽  
Business Strategy ◽  
Organizational Context ◽  
Selection Model ◽  
Valuation Methods ◽  
It Alignment ◽  
Valuation Method ◽  
Business And It Alignment ◽  
The Relationship

The relationship between IT and value is complex and often disputed. Researchers and practitioners have created numerous models and valuation methods to capture this value. Although payoffs from IT investment are a function of strategic alignment, most of these models do not address the alignment of business and IT as a factor that influences or creates value. This paper explores the role of business and IT alignment in the valuation methods of IT assets and investments. It focuses on the impacts resulting from the use of IT assets, considering the function and nature of the impacts. It also explores the alignment of IT valuation and business strategy. The paper is concluded with the construction of a comprehensive selection model that provides guidance for aligning the IT valuation method with the specific characteristics, impacts and organizational context of an IT asset or investment.

A Conceptual Model for Aligning IT Valuation Methods

2010 ◽  
Vol 1 (3) ◽  
pp. 36-54 ◽  
Author(s):  
J. Gilbert Silvius
Keyword(s):  
Conceptual Model ◽  
Business Strategy ◽  
Organizational Context ◽  
Strategic Alignment ◽  
Valuation Methods ◽  
It Alignment ◽  
Valuation Method ◽  
Business And It Alignment ◽  
The Relationship

The relationship between IT and value is complex and often disputed. Researchers and practitioners have created numerous models and valuation methods to capture this value. Although payoffs from IT investment are a function of strategic alignment, most of these models do not address the alignment of business and IT as a factor that influences or creates value. This paper explores the role of business and IT alignment in the valuation methods of IT assets and investments. It focuses on the impacts resulting from the use of IT assets, considering the function and nature of the impacts. It also explores the alignment of IT valuation and business strategy. The paper is concluded with the construction of a comprehensive selection model that provides guidance for aligning the IT valuation method with the specific characteristics, impacts and organizational context of an IT asset or investment.

R&D volatility and market value: the role of executive overconfidence

2019 ◽  
Vol 14 (2) ◽  
pp. 411-431
Author(s):  
Benlu Hai ◽  
Qingzhu Gao ◽  
Ximing Yin ◽  
Jin Chen
Keyword(s):  
Business Performance ◽  
Positive Impact ◽  
Market Value ◽  
Data Set ◽  
Content Type ◽  
Dynamic Perspective ◽  
Innovation Strategies ◽  
The Impact ◽  
The Relationship

Purpose Significant increase or decrease in research and development (R&D) expenditure may have an immense impact on market value. Based on the punctuated equilibrium theory, this paper aims to empirically analyze the impact of R&D volatilities on market value and the moderating effect of executive overconfidence. Design/methodology/approach The study uses the panel data set that covers 902 Shanghai and Shenzhen A-share manufacturing listed firms and multiple regression method to test the theoretical hypotheses. Findings The results show that both positive and negative R&D volatilities have a robust and significant positive impact on the market value. Further analysis shows that the executive overconfidence positively moderates the relationship between R&D volatilities and market value. Research limitations/implications In a rapidly changing and highly competitive environment, firms should recognize that the balance of innovation strategies will help to bring higher market value. Furthermore, firms could improve corporate governance to make the best of managerial characteristics, such as overconfidence, on the innovation decision-making process. Originality/value By pushing the static perspective to a dynamic perspective and empirically documenting the role of executive overconfidence, this study contributes to the literature on the relationship between R&D expenditure and market value, generating theoretical and practical insights for firms to improve innovation governance and innovation strategies to achieve better business performance.

Property valuation methods in practice: evidence from Australia

2019 ◽  
Vol 37 (5) ◽  
pp. 701-718 ◽  
Author(s):  
Rotimi Boluwatife Abidoye ◽  
Ma Junge ◽  
Terence Y.M. Lam ◽  
Tunbosun Biodun Oyedokun ◽  
Malvern Leonard Tipping
Keyword(s):  
Good Practice ◽  
Hedonic Pricing ◽  
Educational Institutions ◽  
Online Questionnaire ◽  
Content Type ◽  
Hedonic Pricing Model ◽  
Valuation Methods ◽  
Property Valuation ◽  
Use Of Technology ◽  
Logic System

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, χ2 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.

The property market, property valuations and property performance measurement

1985 ◽  
Vol 112 (1) ◽  
pp. 19-60 ◽  
Author(s):  
David P. Hager ◽  
David J. Lord
Keyword(s):  
Mathematical Model ◽  
Mathematical Models ◽  
Performance Measurement ◽  
The Other ◽  
Property Market ◽  
Institutional Investment ◽  
Property Valuation ◽  
Valuation Method ◽  
Property Performance

1.1. The Institute has discussed papers on most aspects of institutional investment in recent years, with the notable exception of property. This is not due to the lack of importance of this investment sector to pension funds and life offices, but perhaps to the greater role of actuaries (rather than surveyors) in the other investment media and to the interest in mathematical models for gilts and equities.1.2. In this paper we have not tried to produce a mathematical model of the property market, a new valuation method for property or solutions to the extensive problems of property performance measurement and indices. We have, however, tried to pull together, in a single paper, the volumes of material on the property market and property valuation methods. We have also tried to set down some of the pitfalls of property performance measurement, which often tend to be overlooked in the relentless pursuit for more statistics in this important area.

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