Pricing to market: market value – the enigma of misunderstanding
Journal of Property Investment & Finance
ISSN: 1463-578X
Article publication date: 28 May 2021
Issue publication date: 5 August 2021
Abstract
Purpose
Market value is an estimation of price in the market. It is value in exchange. The valuer's role is to determine the appropriate approach, the method and use the right model to achieve this aim as best as possible. However, underpinning all valuations and property analysis are valuation standards and definitions. This paper looks at the definition of market value and how some market participants may misunderstand or even misrepresent it. This is particularly true when there is a downturn in the market.
Design/methodology/approach
This practice briefing is an overview of the role of market value as a definition of price and how it is often misused by stakeholders in the property market.
Findings
This briefing is a review of the valuation definitions clarifying what they mean and what they do not mean.
Practical implications
The role of the valuer in practice is to use the appropriate definition for the task in hand. The understanding of those definitions is central to the valuation process.
Originality/value
This provides guidance on how valuation definitions can be presented to the client in accordance with the International Valuation Standards.
Keywords
Acknowledgements
This paper forms part of a special section “Practice Briefing”.
Citation
French, N., Crosby, N. and Thorne, C. (2021), "Pricing to market: market value – the enigma of misunderstanding", Journal of Property Investment & Finance, Vol. 39 No. 5, pp. 492-499. https://doi.org/10.1108/JPIF-05-2021-0041
Publisher
:Emerald Publishing Limited
Copyright © 2021, Emerald Publishing Limited