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.

Property valuation: the hedonic pricing model – location and housing submarkets

2019 ◽  
Vol 37 (6) ◽  
pp. 589-596 ◽  
Author(s):  
Gaetano Lisi
Keyword(s):  
House Prices ◽  
Hedonic Pricing ◽  
Real Estate Market ◽  
Pricing Models ◽  
Content Type ◽  
Hedonic Pricing Model ◽  
Property Valuation ◽  
Housing Submarkets ◽  
Practical Implications

Purpose The purpose of this paper is to comment upon the use of hedonic pricing models for the valuation of property. This model can be particularly useful for some housing markets. Design/methodology/approach This Education Briefing is an explanation of the how hedonic pricing can be useful in looking at the effect of “location” on the house prices within different submarkets using the Italian real estate market as an example. Findings Although, this case study is relatively straightforward, it shows how the application of the market approach can provide insights in cases where the comparable properties belong to different submarkets with relatively few transactions. Practical implications In cases of mass appraisals, hedonic pricing models can provide a broad indication of value across submarkets. Originality/value This paper develops a general framework that connects multiple regression analysis, direct comparison model and submarket binary variables.

NEETs: a case study in addressing the issues relating to disengaged youth in East Cleveland

2014 ◽  
Vol 56 (5) ◽  
pp. 467-480 ◽  
Author(s):  
David William Stoten
Keyword(s):  
Young People ◽  
Good Practice ◽  
Youth Unemployment ◽  
Geographic Area ◽  
Educational Institutions ◽  
Content Type ◽  
North East ◽  
Executive Agencies ◽  
Support Programmes ◽  
Insight Into

Purpose – The purpose of this paper is to report on the challenges and approaches taken to address the issue of NEETs in North East England. The area around Redcar in East Cleveland has high levels of unemployment, particularly youth unemployment. This paper compared actions taken in England in the support offered to disaffected youth and reports on the strategy pursued in East Cleveland. Design/methodology/approach – The research was primarily desk-based, interrogating Government publications as well as that generated by executive agencies and local educational institutions. A number of key figures were surveyed in addition to obtain a grounded insight into the challenges that confront those who work in this area. Findings – This study identified areas of good practice that could be considered elsewhere. Its conclusions emphasise that solutions to the NEETs problem are to be found in bespoke and individually focused programmes that value the contribution of young people to society and aim to build their self-esteem and confidence. It also highlights the importance of inter-agency cooperation and joined up strategic planning. Research limitations/implications – This study would have benefited from the opportunity to survey the views of young people involved in support programmes. Given issues of confidentiality, this was not possible. Originality/value – This study adds to the literature generated by Government bodies and educational institutions on the issue of disaffected youth. Its value lies in its reference to a specific geographic area and its insight into the work of local professionals in tackling this complex social issue.

scholarly journals Modelling the drivers of the UK multi-let industrial property market: an exploratory study

2020 ◽  
Vol 38 (4) ◽  
pp. 585-596
Author(s):  
David Higgins ◽  
Tsvetomira Vincent ◽  
Peter Wood
Keyword(s):  
Real Estate ◽  
Hedonic Pricing ◽  
Valuable Insight ◽  
Pricing Model ◽  
Property Market ◽  
Industrial Property ◽  
Content Type ◽  
Hedonic Pricing Model ◽  
Significant Difference ◽  
Asset Class

PurposeMulti-let industrial (MLI) estates are an emerging £15 billion UK real estate asset class that can offer attractive returns, a diversified income base, constrained supply and extensive management opportunities to add value within an operational platform. This investment appeal is supported by the evolving MLI occupier market with the growth of small to medium enterprises (SME) requiring modern urban business space driven in part by technology advances offering new streams of supply chain connectivity between businesses and potential clients at a local level.Design/methodology/approachTo understand more about MLI properties, this study utilises a hedonic pricing model to quantify property values as a function of defined variables. The dataset used for this research is a sample portfolio of 26 multi-let industrial properties. The dataset was analysed alongside eleven physical, financial and locational factors. Interestingly, the hedonic pricing model results showed that only four characteristics are value-affecting across the selected properties: namely (1) Granularity of the property income, (2) Distance from the nearest motorway, (3) Distance to the nearest town centre and (4) Gross internal floor area. A chi–test confirmed that there was no significant difference between the modelled values and the supplied property valuations.FindingsThis preliminary study offers valuable insight into MLI property market drivers and could easily form a simple decision-making tool to examine potential MLI opportunities in this developing real estate asset class.Originality/valueIn detailing these key MLI property features, current research is limited and focused primarily on market commentary. New knowledge on the MLI property market can provide a platform creating interesting opportunities for fund managers with an intensive management engagement strategy.

An updated survey of factors influencing property valuation accuracy in Australia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rotimi Boluwatife Abidoye ◽  
Wei Huang ◽  
Abdul-Rasheed Amidu ◽  
Ashad Ali Javad
Keyword(s):  
Online Questionnaire ◽  
Chi Square ◽  
Content Type ◽  
The Public ◽  
Property Valuation ◽  
Current State ◽  
Chi Square Test ◽  
The Subject ◽  
And Training ◽  
Practical Implications

PurposeThis study updates and extends the current work on the issue of accuracy of property valuation. The paper investigates the factors that contribute to property valuation inaccuracy and examines different strategies to achieve greater accuracy in practice.Design/methodology/approachAn online questionnaire was designed and administered on the Australian Property Institute (API) registered valuers, attempting to examine their perceptions on the current state of valuation accuracy in Australia. The variables/statements from responses are ranked overall and compared for differences by the characteristics of respondents.FindingsUsing mean rating point, the survey ranked three factors; inexperience valuers, the selection, interpretation and use of comparable evidence in property valuation exercise and the complexity of the subject property in terms of design, age, material specification and state of repairs as the most significant factors currently affecting valuation inaccuracy. The results of a Chi-square test did not, however, show a significant statistical relationship between respondents' profile and the perception on the comparative importance of the factors identified. Except for valuers' age and inexperience valuers and valuers' educational qualification and inexperience valuers and the selection, interpretation and use of comparable evidence in property valuation exercise. Also, the three highly ranked strategies for reducing the level of inaccuracy are: developing a global mindset, use of advanced methodology and training valuers on market forecasting skills.Practical implicationsIn order for valuers to provide state-of-the-art service to the public and to remain relevant, there is a need to accurately and reliably estimate valuation figures. Hence, the strategies highlighted in this study could be considered in a bid to reduce property valuation inaccuracy in practice.Originality/valueThis study provides an updated overview of the issue of property valuation inaccuracy in the Australia valuation practice and examines the strategies to reduce it.

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.

Accommodation prices on Airbnb: effects of host experience and market demand

2018 ◽  
Vol 30 (5) ◽  
pp. 608-620 ◽  
Author(s):  
Francesca Magno ◽  
Fabio Cassia ◽  
Marta Maria Ugolini
Keyword(s):  
Hedonic Pricing ◽  
Pricing Strategies ◽  
Market Demand ◽  
Content Type ◽  
Hedonic Pricing Model ◽  
Price Adjustments ◽  
Major Trend ◽  
Price Management ◽  
Price Determinants ◽  
The City

Purpose Accommodation sharing is a major trend shaping the hospitality industry, and Airbnb is the most prominent sharing platform driving this growth. While price convenience is reported as one of the main strengths of Airbnb accommodations, only a few studies have examined price determinants. In particular, it is unclear whether hosts dynamically adjust prices for shared accommodation based on their experience with price management and on the level of market demand. The purpose of this paper is to fill this gap by suggesting and testing a comprehensive hedonic pricing model. Design/methodology/approach Data from all 1,056 Airbnb listings for accommodations available in the city of Verona, Italy on four booking dates in 2016 are collected and analysed through regression analysis. Findings The results highlight that price is significantly related to the level of the host’s accumulated experience and the level of market demand on a specific booking date. The findings provide support for the ability of hosts to dynamically adjust prices for their accommodations. Practical implications Drawing on the innovator’s dilemma theory, this study suggests some strategies that traditional hotels may adopt to react to the disruptive nature of Airbnb. Originality/value This is one of the few studies to address hosts’ pricing strategies and specifically consider price adjustments owing to variations in host experience and market demand.

Evaluating optimal purchasing and selling decisions of beef cattle replacement females

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Christopher N. Boyer ◽  
Andrew P. Griffith ◽  
Karen L. DeLong
Keyword(s):  
Net Present Value ◽  
Hedonic Pricing ◽  
Pricing Model ◽  
Sale Price ◽  
Content Type ◽  
Hedonic Pricing Model ◽  
Productive Life ◽  
Pregnancy Status ◽  
Cull Cow ◽  
Selling Decisions

PurposeThe objective of this research was to determine the optimal age and pregnancy status for buying and selling replacement of beef females for risk-neutral and risk-averse producers.Design/methodology/approachA hedonic pricing model was estimated to measure how age, pregnancy status, breed and cull cow prices impact the sale price of these cattle. Data came from an annual heifer and cow sale in Tennessee between 2009 and 2018. A financial simulation model was developed to generate distributions of net present value (NPV) for buying replacement females at various ages and pregnancy status and then selling that female at various ages and pregnancy status.FindingsThe hedonic pricing model indicates sale prices were highest for five-year-old cows that were between four to five months pregnant. NPV was higher for buying heifers versus buying cows and for buying an open female versus a pregnant female. Regardless of age and pregnancy status when purchased, NPV was higher when the female was sold as pregnant prior to the end of her productive life. The risk analysis showed that risk aversion, buying older open cows and selling them as pregnant earlier in their productive life was preferredOriginality/valueThis research offers unique insight into how pregnancy status and age at sale impacts the animal's NPV while considering risk. These results have implications for educating producers on purchasing and selling decisions of heifers and cows as well as for lenders who finance these purchases.

The impact of intragroup relationship conflict on intention to re-enroll

2019 ◽  
Vol 29 (6) ◽  
pp. 1370-1385
Author(s):  
Ying Zhu ◽  
Valerie Lynette Wang ◽  
Evan Leach ◽  
Kevin Cruthirds ◽  
Yong Wang
Keyword(s):  
Computer Mediated Communication ◽  
Virtual Learning ◽  
Relationship Conflict ◽  
Emotional Expressiveness ◽  
Educational Institutions ◽  
Learning Context ◽  
Mediated Communication ◽  
Online Questionnaire ◽  
Content Type ◽  
The Impact

Purpose Scholars have identified several predictors of learner satisfaction, but little research addresses the impact of intragroup conflict in a virtual learning context. The purpose of this paper is to investigate the potentially deleterious effects of perceived intragroup relationship conflict on virtual learners’ intention to re-enroll. Design/methodology/approach Data were systematically collected from virtual learners using an online questionnaire and then analyzed by multiple regression models. Findings The results show that emotional expressiveness is an antecedent to perceived intragroup relationship conflict, and the relationship is moderated by individuals’ perceived enjoyment of computer-mediated communication. Virtual learners with a higher emotional expressiveness (i.e. extraverts) experience higher perceived relationship conflict, which in turn, lowers their intention to re-enroll. Research limitations/implications The study confirms the antecedent and consequence of perceived intragroup relationship conflict in a virtual learning context. Practical implications Educational institutions and businesses may use three proposed strategies to deal with intragroup relationship conflict. Originality/value The study contributes to the limited knowledge on how to effectively manage virtual learning interactions by educational institutions and businesses.

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.

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