scholarly journals The Valuation of Hope Value for Real Estate Development

2017 ◽  
Vol 25 (2) ◽  
pp. 91-101 ◽  
Author(s):  
Małgorzata Renigier-Biłozor ◽  
Maurizio d’Amato
Keyword(s):  
Real Estate ◽  
Real Option ◽  
Legal Framework ◽  
Real Estate Market ◽  
Small Sample ◽  
The Real Estate ◽  
Real Option Theory ◽  
General Terms ◽  
Real Estate Valuation ◽  
The Difference

Abstract In the valuation of a property subject to development, the valuer may consider the potential aspect of the value of both land to be improved and a building to be refurbished. These kinds of valuations are complex, especially when a prudent assessment of value is required. In general terms, all properties may have potential development which, in some cases, can be termed “hope”. In particular, uncertainty regarding the change in the legal framework may create expectations as to the uncertain variation of property value in the future. In these cases, it may be necessary to deal with hope value or future value, trying to reach the value of a property subjected to uncertain changes. Hope value is the difference between the existing use value and the price that the market might pay for future transformation. The main aim of the paper is the elaboration of a methodology to determine the hope value. In this work, a real option model for the valuation of hope value in the real estate market will be applied to a small sample of residential properties located in Olsztyn that are subject to possible transformation. The possibility of a transformation may create expectations and may influence the value of the property. Although the applications of these methods to real estate valuation are fairly recent, the International Valuation Standards have included real option theory in the income approach as a valuation method since 2011.

Real Estate Valuation Fraud

2015 ◽  
pp. 278-291
Keyword(s):  
Real Estate ◽  
Market Value ◽  
Real Estate Market ◽  
Personal Gain ◽  
The Real ◽  
The Real Estate ◽  
Real Estate Valuation ◽  
The Real Estate Market ◽  
Real Market

Valuation profession is a link between the borrower and the lender. Fraud is an intentional deliberate deception committed for illegitimate personal gain. There are several forms of real estate fraud, especially when the real estate market is facing a boom. The most widespread types of real estate fraud include the preparation of two sets of settlement statements, property flipping, and fraudulent qualifications. There are mainly three types of valuation to look out for. Valuation may be received from an unauthorized agency. Furthermore, a real valuation may be altered from the original to generate profit. Thirdly, intentional inflation of the value of a property will hide the real market value. It is usually difficult to spot real estate fraudulent activities, so deep investigations and professionalism is needed. This chapter explores real estate fraud.

scholarly journals Sustainable Value of Investment in Real Estate: Real Options Approach

2018 ◽  
Vol 10 (12) ◽  
pp. 4665 ◽  
Author(s):  
Marek Durica ◽  
Danuse Guttenova ◽  
Ludovit Pinda ◽  
Lucia Svabova
Keyword(s):  
Real Estate ◽  
Real Option ◽  
Investment Project ◽  
Real Estate Market ◽  
Capital City ◽  
Present Value ◽  
The Real ◽  
The Real Estate ◽  
Specific Investment ◽  
The Real Estate Market

The issue of application of real option valuation approach in the valuation of investment project is presented in the article in a way in which the flexibility of the project could be included in the process of its valuation. The authors apply the valuation approach in case of a specific investment project in the real estate in the capital city of the Czech Republic—Prague, using the option to expand, to contract, and to abandon the project. The main aim of this case study is to present a practical application of the investment valuation and to construct an option pricing model for real estate investment which considers and integrates as many aspects of the investment and market environment as possible to describe the best situation of the real estate market and its development. The valuation of the investment is carried out using a universally applicable numerical method of binomial trees. The results obtained are subjected to the sensitivity analysis with respect to the discount rate, value of the most influential parameter of the volatility and the input option parameters. The results of the valuation of the project obtained using the real option approach are important mainly for the management of the company in the process of quantification of the present value of future investments. Implementation of managerial interventions enables for optimizing the value of the project not only in case of favourable development of the real estate market, but particularly in case of unfavourable development. Therefore, they are important in order to protect an investor from potential high losses. Finally, the valuation of these interventions increases the present value of the project, contributing to the decision of the corporate management regarding its implementation.

scholarly journals REAL ESTATE MARKET: ESSENCE, COMPONENTS, FEATURES OF ANALYSIS IN EVALUATION ACTIVITY

2021 ◽  
Author(s):  
Olena Rybina
Keyword(s):  
Real Estate ◽  
Specific Property ◽  
Real Estate Market ◽  
Equal Rights ◽  
Economic Management ◽  
Natural Form ◽  
Evaluation Activity ◽  
The Real Estate ◽  
Real Estate Appraisal ◽  
Real Estate Valuation

The article highlights the essence of the concept of "real estate market". The components of the real estate market are analyzed and generalized. The common features of real estate that distinguish it from movable property are studied and systematized, namely: real estate, land connection, uniqueness, usefulness, fundamentality, durability, need for management, increasing value, regulation, problematic concealment, high cost of carrying out operations. The paper identifies three key components of real estate as a resource: functional, financial and physical (operational). It should be noted that a comprehensive consideration of the three above components of real estate management created a new organizational aspect. The paper systematizes the classification of real estate, which is necessary for transactions with it and assess its value. In the process of real estate classification, its separate groups, types and kinds are distinguished. Real estate can be classified on the following grounds: by the nature of use; by degree of specialization; for program purposes of ownership; according to the degree of readiness for operation; on reproducibility in natural form. Evaluation activities provide an information basis for making economic management decisions, contributes to the restructuring of the economy, the formation of a competitive market environment, the intensification of investment processes. Independent real estate valuation is designed to ensure equal rights for all members of society, through a fair assessment of their property rights and obligations. The development of appraisal activity is an integral part of the overall process of economic reform and the rule of law. As a result of the analysis, it was found that the assessment of real estate is the establishment of the value equivalent of the object. In the application plan, real estate appraisal means the process of forming a reasonable valuation of a specific real estate object, which is made to order and refers to a certain time of the appraisal. From the above we can conclude that real estate appraisal is a targeted process aimed at a specific property.

scholarly journals Application of AHP Method in Assessment of the Influence of Attributes on Value in the Process of Real Estate Valuation

2019 ◽  
Vol 27 (4) ◽  
pp. 15-26
Author(s):  
Krzysztof Dmytrów ◽  
Sebastian Gnat
Keyword(s):  
Real Estate ◽  
Real Estate Market ◽  
Comparative Approach ◽  
Ahp Method ◽  
The Real ◽  
The Real Estate ◽  
Real Estate Valuation ◽  
The Impact ◽  
Hierarchy Process

Abstract Property valuation in the comparative approach requires the determination of the impact of market characteristics on the formation of prices on the local real estate market. Valuers have a variety of methods for determining weights. Some of them require the collection of a sufficiently large database of information on transactions. However, this is not always possible. In the absence of sufficient data, alternative approaches, including an expert approach, may be used. The goal of the article is the proposal of an expert approach at the stage of assessing the influence of attributes on the value of the real estate. The AHP (Analytical Hierarchy Process) method will be used. On its basis, pairwise comparisons of the importance of attributes will be done by experts (valuers). By means of the AHP method, the weights of each attribute will be obtained and, subsequently, the influence of each attribute on the real estate value will be assessed. Research will be done on the basis of 318 real estates in Szczecin.

Using Big Data technologies for real estate valuation

2020 ◽  
pp. 110-118
Author(s):  
Н.И. Царькова ◽  
О.С. Конова
Keyword(s):  
Big Data ◽  
Real Estate ◽  
Research Work ◽  
Real Estate Market ◽  
Qualitative Assessment ◽  
The Real Estate ◽  
Real Estate Valuation ◽  
The Real Estate Market ◽  
Big Data Technologies ◽  
Python Programming

Основная цель статьи – показать на практике возможности технологий Big Data и проанализировать ситуацию на рынке недвижимости. В качестве примера используются данные онлайн площадок по купле/продаже недвижимости, содержащие в себе порядка миллиона строк. Для исследования рынка была произведена качественная оценка сложившейся ситуации в России в 2020 году с учётом последних событий. Исходные данные были использованы для поверхностного анализа и предварительной оценки складывающейся стоимости недвижимости в городе по административным округам. Анализ проводился при помощи языка программирования Python. Полученные результаты исследования были визуализированы с использованием возможностей программных средств. Произведено сравнение результатов проведённого анализа для определения дальнейших целей исследовательской работы. The main purpose of the article is to show in practice the capabilities of Big Data technologies and analyze the situation on the real estate market. As an example, we use data from online real estate purchase/sale sites that contain about a million lines. For market research, a qualitative assessment of the current situation in Russia in 2020 was made, taking into account recent events. The initial data were used for a superficial analysis and preliminary assessment of the emerging value of real estate in the city by administrative districts. The analysis was performed using the Python programming language. The results of the study were visualized using the capabilities of software tools. The results of the analysis are compared to determine the further goals of the research work.

scholarly journals INCOME APPROACH AND PROPERTY MARKET CYCLE

2015 ◽  
Vol 19 (3) ◽  
pp. 207-219 ◽  
Author(s):  
Maurizio D’AMATO
Keyword(s):  
Real Estate ◽  
Academic Research ◽  
Real Estate Market ◽  
Property Market ◽  
The Real Estate ◽  
Real Estate Bubble ◽  
Valuation Method ◽  
Real Estate Valuation ◽  
Income Approach ◽  
Valuation Process

This paper is focused on a proposed valuation method including real estate market cycle analysis in real estate valuation process. Starting from early works on this field (d'Amato 2003) the work highlight the dangerous gap between academic research on property market cycles and professional practice of property valuation. The danger of this gap comes from the fact that in spite it is well documented that the property market has a “natural” cyclical behaviour, the opinions of value based on income approaches still relies on assumption of a stable or perpetually growing (or decreasing) income. This may be one generating factors of the real estate bubble and the subsequent financial markets crisis experienced recently. This paper offers a general introduction on cyclical capitalization as a further family of valuation methodologies based on income approach. This method includes in the traditional Dividend Discount Model more than one g-factor in order to plot property market cycle. An empirical application of Cyclical Capitalization is offered to the office market of the Eastern London.

scholarly journals Improvements in the civil engineering focused on the real estate appraisal with the use of artificial intelligence and fuzzy logic

2020 ◽  
Vol 12 ◽  
pp. 44-52
Author(s):  
Vladimir Surgelas ◽  
Vivita Pukite ◽  
Irina Arhipova
Keyword(s):  
Artificial Intelligence ◽  
Fuzzy Logic ◽  
Real Estate ◽  
Civil Engineering ◽  
Central Area ◽  
Real Estate Market ◽  
The Real ◽  
The Real Estate ◽  
Property Evaluation ◽  
Real Estate Valuation

In the field of civil engineering, there are some traditional methods of property evaluation that deal with these techniques. However, there is controversy about what would bring the best performance, a greater degree of ease and clarity without presenting multicollinearity. This controversy is due to the difficulty of finding appropriate predictive variables in real estate valuation since they often do not fit the binary model, involving human subjectivity. From this, the research aims to propose improvements in the property evaluation process with the use of artificial intelligence without presenting the effects of multicollinearity and autocorrelation, to predict the value of the real estate market. The object of study is a standard 2-bedroom residential apartment with 48m-2 located in the central area of Jelgava, Latvia, in October 2019. Therefore, the methodology uses statistical inference as an initial analysis parameter and the fuzzy logic incorporates the best association rules which are originated from artificial intelligence extracted from the apriori algorithm. Finally, the results obtained by regression and fuzzy were compared with the value in euros m-2, according to the official publication of the government of Latvia, referring to the market value of a 2-bedroom residential apartment in the city of Jelgava, Latvia, in October 2019, this government publication is the reference for this study. The statistical hypotheses that allowed its validation were accepted. In the Fuzzy model, the results indicated an excellent equivalence to market prices in relation to the traditional valuation process.

Research on Prediction of Urumqi City Real Estate Supply and Demand Based on Gray System

2014 ◽  
Vol 1065-1069 ◽  
pp. 2530-2533
Author(s):  
Bi Lin Shao ◽  
Ting Meng ◽  
Wen Juan Liu
Keyword(s):  
Real Estate ◽  
Supply And Demand ◽  
Real Estate Market ◽  
The Real ◽  
The Real Estate ◽  
Gray System ◽  
Housing Area ◽  
The Real Estate Market ◽  
Market Situation ◽  
The Difference

This paper takes gray prediction forecasting model as a tool to forecast the real estate market in Urumqi from development and investment, construction housing area and sale of housing area. The difference between the actual value and the predicted prediction value is small, with high accuracy. Predictive value can be reflected in the coming period of the real estate market situation in Urumqi. From the predicted results, we could know that there is a lot potential in Urumqi real estate market in next few years and investment in real estate the construction housing area, housing area of real estate sale will get a larger annual growth. In general, there will be increasing potential in the development of the real estate market in Urumqi. Meanwhile, Urumqi real estate market will tend to rationally develop under the regulation of government in the next few years.

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