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Valuation of residential property: analysis of participant behaviour

Alastair Adair (Senior Lecturer, School of the Built Environment, University of Ulster, Newtownabbey, Northern Ireland)
Jim Berry (Lecturer, School of the Built Environment, University of Ulster, Newtownabbey, Northern Ireland)
Stanley McGreal (Reader, School of the Built Environment, University of Ulster, Newtownabbey, Northern Ireland)

Journal of Property Valuation and Investment

ISSN: 0960-2712

Article publication date: 1 March 1996

Abstract

The comparative method of valuation is based on valuers interpreting prices agreed in the open market to arrive at an opinion of value. This requires the consideration of a diverse range of variables and an assessment of their relative impact. Behavioural analysis using an independent sample of buyers and valuers operative in the Belfast residential market indicates that there are statistically significant differences between the two sample groups in the scoring and ranking of variables. In particular valuers are shown to place a greater emphasis on environmental or neighbourhood effects. Discusses the outcome of this empirically‐based research and analyses whether differences in the treatment of variables between the valuer and buyer samples are reflected in different price and value distributions. The results indicate that valuation accuracy to within 5 per cent of transaction price is not upheld; rather it is argued that a 10 per cent threshold has greater credibility.

Keywords

Citation

Adair, A., Berry, J. and McGreal, S. (1996), "Valuation of residential property: analysis of participant behaviour", Journal of Property Valuation and Investment, Vol. 14 No. 1, pp. 20-35. https://doi.org/10.1108/14635789610107453

Publisher

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MCB UP Ltd

Copyright © 1996, MCB UP Limited