REAL ESTATE INVESTMENT VALUATION
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Real Estate Investment Valuation – Key Insights
- Limited participation leads to less competition
- Prices may reflect monopolistic influence, not true market value
- Commercial real estate often lacks pricing transparency
Improving Market Efficiency
- Use of advanced valuation techniques helps clarify pricing
- Publishing data on sales and trends boosts transparency
- Involvement of professional estate agencies adds reliability
- Government & Industry Efforts
Reduced stamp duties and fees attract more investors - Transparent practices adopted by many real estate firms
- Advanced analytics are driving better decision-making
Market imperfections remain, but efficiency is improving
Market analysis- How Important in Property valuation?
Accurate property valuation requires thorough market analysis. A valuer must assess the property within the context of competing assets, considering factors like location, demand, and future potential. Evaluating both the immediate neighbourhood and the wider region ensures a fair and reliable market value
How efficient is the real property market?
A market helps allocation of scarce resources in an economy through the prices mechanism. The price acts as both an indicator and an incentive of demands and supply of goods and commodities in the market.
Thus the lack of knowledge of price, the circumstances of the individuals buyers and the high cost of acquisition may create price differences in different part of the same market causing market imperfection.
Valuations Considered in Property uses.
The process valuation should invariably be accompanied by an attempt to view the asset in broad light so that the utility of an asset or property may be measured with due consideration of its existing use, probable alternative uses or expected future use in the foreseeable future. The urban lands are transacted mostly for residence, services and investment. Dealing in real estate for speculation are also common. When developed with building land imbibes potential for multiple uses, vis a vis., residential, commercial, mercantile, industrial, institutional, storage, congregational and soimpacts thevaluation.