A REVIEW OF REAL ESTATE VALUATION AND OPTIMAL PRICING TECHNIQUES
Journal Title: Asian Economic and Financial Review - Year 2014, Vol 4, Issue 12
Abstract
Real estate is a unique asset whose valuation is critical to its management and development. Its uniqueness lies in the fact that in most economies, unlike the stock market, there is absence of an active interaction between sellers and buyers as in the normal market to establish price, hence most property portfolio decisions are based on subjective valuation rather than price. This paper analysed and reviewed the relevant theories and literature with the quest to establish a valuation model that can serve as proxy for optimal price. Achieving optima and efficient pricing requires that valuation serve as accurate reflection of all available and relevant information about the property. Contemporary traditional valuation models and approaches reviewed include the traditional market or sales comparative approach, cost approach, income capitalization approach, the hedonic models, mean or median transaction prices, repeat-sales method, hybrid methods, the option model, the equivalent yield model, the constant growth model, and periodic growth or equated yield model. It is suggested that the optimal value of a property or a real estate equates market value, to the true value and present value.
Authors and Affiliations
Kehinde Adekunle Adetiloye*| Department of Banking and Finance School of Business Covenant University Ota, Nigeria, Patrick Omoruyi Eke| Department of Banking and Finance Lagos State University Ojo, Lagos, Nigeria
Keywords
Related Articles
- EP ID EP2143
- DOI -
- Views 435
- Downloads 61
CONTRIBUTION OF ADVANCED TECHNOLOGY AND FOREIGN CAPITAL TO GROWTH OF DIFFERENT STAGE OF DEVELOPMENT COUNTRIES
This study determines influence of advanced technology and foreign capital on economic growth apart from contribution of the other major domestic inputs. The countries were classified into four groups; i.e., lower and lo...
ZAKAH AS AN ISLAMIC MICRO-FINANCING MECHANISM TO PRODUCTIVE ZAKAH RECIPIENTS
There are various forms of zakah distribution practiced by the zakah institutions. One of them is the distribution of zakah in a form of business capital given to productive zakah recipients. This form of zakah distrib...
Favorable and Unfavorable Conditions for Innovation: Some Cross Country Evidence
The paper employs cross country regression analysis to estimate the effect of democracy and income inequality, adjusting for the level of income and other variables, on country innovation. It finds that both of these var...
FINANCIALIZATION OF HOUSEHOLD SECTOR IN TURKEY., 2000-2013
In financialization age which is last stage of capitalism, traditional banking governance have changed their role. Banking has become mainly dependent on lending individuals without regulation. Household indebtedness was...
Permanent Income Hypothesis, Myopia and Liquidity Constraints: A Case Study of Pakistan
This paper is an attempt to test the Permanent Income Hypothesis (PIH), Myopia and Liquidity Constraints as a case study for Pakistan. The paper also attempts to find out valid reasoning incase the PIH is rejected. Hall...