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Improving valuation accuracy, especially for sale and acquisition purposes, remains one of the key targets of the global real estate research agenda. Among other recommendations, it has been argued that the use of technology-based advanced valuation methods can help to narrow the gap between asset valuations and actual sale prices. The purpose of this paper is to investigate the property valuation methods being adopted by Australian valuers and the factors influencing their level of awareness and adoption of the methods.

An online questionnaire survey was conducted to elicit information from valuers practising in Australia. They were asked to indicate their level of awareness and adoption of the different property valuation methods. Their response was analysed using frequency distribution, χ² test and mean score ranking.

The results show that the traditional methods of valuation, namely, comparative, investment and residual, are the most adopted methods by the Australian valuers, while advanced valuation methods are seldom applied in practice. The results confirm that professional bodies, sector of practice and educational institutions are the three most important drivers of awareness and adoption of the advanced valuation methods.

There is a need for all the property valuation stakeholders to synergise and transform the property valuation practice in a bid to promote the awareness and adoption of advanced valuation methods, (e.g. hedonic pricing model, artificial neural network, expert system, fuzzy logic system, etc.) among valuers. These are all technology-based methods to improve the efficiency in the prediction process, and the valuer still needs to input reliable transaction data into the systems.

This study provides a fresh and most recent insight into the current property valuation methods adopted in practice by valuers practising in Australia. It identifies that the advanced valuation methods could supplement the traditional valuation methods to achieve good practice standard for improving the professional valuation practice in Australia so that the valuation profession can meet the industry’s expectations.

The emerging trend in the global real estate valuation practice has led to the development of advanced valuation approaches to replace the traditional methods. The purpose of this paper is to investigate the extent to which real estate valuers practicing in Nigeria are aware and use these advanced approaches in real estate valuation practice.

Both traditional and advanced approaches were identified from the literature. An online-based questionnaire survey was administered on estate surveyors and valuers to measure their level of awareness and frequency of use of the identified valuation approaches. The feedback was collated and analyzed using descriptive statistical analysis.

The professionals are mostly aware of the traditional methods and always use the “sales comparison method” in practice. In contrast, they are not very aware of the advanced approaches and hence, only use the hedonic pricing model occasionally in practice.

The study only focuses on the Lagos metropolis, a nationwide survey will produce more comfortable generalizable findings.

This is a wake-up call for the real estate regulatory bodies and indeed all the real estate professionals in Nigeria to embrace the use of the advanced valuation approaches in practice, in order to remain relevant in the international real estate practice.

Implementation of the recommendations of this study could help position the Nigerian real estate professionals and the industry for a global exposition.

Suggests that businesses need a method specifically designed to assess the value of knowledge‐based system (KBS) investments. Explains the inadequacies of current valuation methods when they are applied to KBS investment decisions. Proposes a graphical valuation method which adapts the Theory of Reasoned Action (TRA) to overcome these inadequacies and help business executives make informed KBS investment decisions. Presents an example of the method’s application to a KBS at a large multinational sales and manufacturing company.

Following the publication of the Mallinson Report in March 1994, the Royal Institution of Chartered Surveyors undertook a survey of Valuation Practice in the UK in accordance with Recommendation 25 of the report. In January 1995 questionnaires were sent out to a cross‐section of practitioners in the market. The responses represented a wide range of experience, geographical location and type of work. The majority of respondents spent more than 50 per cent of their time undertaking valuations. The questionnaire distinguished between valuations undertaken for pricing (asset valuations, sale/purchase advice, CPO, etc.) and calculations of worth, where the role of the valuer was to analyse the investment for a specific purpose for a specific client. Respondents were asked to indicate whether they tended to adopt a “traditional” model or a “DCF” model for the valuation of a number of different types of investment. These were rack‐rented freeholds, reversionary freeholds, over‐rented property, short leaseholds and long leaseholds. In the replies there was a consensus opinion that, when undertaking calculations of worth, the DCF method should be used as the principal method but tempered with the use of traditional techniques alongside. Conversely, when pricing property the traditional method was considered to be the appropriate tool, although many respondents said that they would also use DCF techniques on the more “unusual” interests such as over‐rented. With regard to the actual method adopted, most valuers using traditional methods favoured the use of an all‐risk/equivalent yield approach using layered income flows. Those using DCF preferred the short‐cut approach with a reversion to a sale price after the first change of income. Clearly suggests that there is a greater understanding of explicit techniques than anecdotal evidence had previously suggested.

The valuation of real estate is a central tenet for all businesses. Land and property are factors of production and, as with any other asset, the value of the land flows from the use to which it is put, and that in turn is dependent upon the demand (and supply) for the product that is produced. Valuation, in its simplest form, is the determination of the amount for which the property will transact on a particular date. However, there is a wide range of purposes for which valuations are required. These range from valuations for purchase and sale, transfer, tax assessment, expropriation, inheritance or estate settlement, investment and financing. The objective of the paper is to provide a brief overview of the methods used in real estate valuation. Valuation methods can be grouped as traditional and advanced. The traditional methods are regression models, comparable, cost, income, profit and contractor’s method. The advanced methods are ANNs, hedonic pricing method, spatial analysis methods, fuzzy logic and ARIMA models.

The aims of this paper are to: provide a systematic overview of various publications and international research efforts undertaken to integrate sustainability considerations into the property valuation process; summarize the key results of these publications and research efforts; highlight the role of key valuation‐input variables in considering sustainability issues when applying traditional methods of valuing income‐producing properties; briefly present and comment on a broader concept of property value and the resulting implications for property valuation practice; and provide recommendations for change in the everyday practice of individual valuation professionals and for the future operation of professional organisations and valuation‐standard‐setting bodies.

This paper builds on the authors' previous contributions to the discussion on sustainability and valuation, presents advances on these previous works and condenses the more theoretical issues debated earlier into concrete recommendations for future action. Starting from a literature review of the different strands of research relating to the new discipline of sustainable property investment, 31 publications and ten research projects that investigate in detail the topic of sustainability and property valuation are identified and the current stage of discussion is briefly commented on. On this basis, a systematisation of existing approaches for the integration of sustainability issues into the valuation process is presented, followed by further explanations of practical valuation issues such as identifying the key “adjustment screws” or valuation input parameters of traditional valuation methods. Finally, the underlying concept of property value is discussed and a “value map” is presented which conceptualises the relationships between different components of value as well as other value‐influencing forces.

Changes are required in the processes of gathering, processing and presenting property‐related information, as well as in the methods for determining individual valuation‐input parameters and for explicitly stating formerly implicit assumptions and qualitative judgement. This includes but is not limited to the extension of the scope and informational content of standard valuation reports to include sensitivity analyses, risk documentation and a separate section on sustainability. The required changes should be supported by actions that could be undertaken by the professional and valuation‐standard‐setting bodies and organisations within the valuation world. These actions include: embracing and improved marketing of the qualitative nature of the valuation service; the development of educational material and formal guidelines; the provision of dedicated market research to assist valuation practitioners operating in different market segments, geographic regions and local sub‐markets; and adjusting and further developing existing valuation standards to enable and support individual practitioners in offering a two‐tier valuation service to clients.

This paper proposes that valuation professionals and their professional bodies are confronted with a new reality of changing value perceptions and systems among market participants, and offers practical recommendations on how to cope with this situation.

The purpose of this paper is to explain the rationale for integrating sustainability issues into property valuation theory and practice and to provide initial suggestions for valuers on how to account for sustainability issues within valuation reports.

The authors emphasise the key role of valuation professionals and of the valuation process itself in achieving a broader market penetration of sustainable construction. It is explained that, on the one hand, property valuation represents the major mechanism to align economic return with environmental and social performance of property assets, and thus to express and communicate the advantages and benefits of sustainable buildings. On the other hand, it is explained that gradual changes in market participants' perceptions in favour of sustainable buildings must be reflected within the property valuation and associated risk assessment process (otherwise valuers would produce misleading price estimates). The authors identify both the financial benefits and risk reduction potential of sustainable design as well as valuation input parameters that would allow these benefits to be reflected in property price estimates.

The authors show that the main reasons for immediately and rigorously integrating sustainability issues into property valuation are as follows: more sustainable patterns of behaviour are urgently necessary to sustain the viability of the Earth's ecosystems; a huge untapped market potential exists for sustainable property investment products and consulting services; sustainable buildings clearly outperform their conventional competitors in all relevant areas (i.e. environmentally, socially and financially); neglecting the benefits of sustainable design leads to distorted price estimates; and reflecting sustainability issues in property price estimates is already possible and the validity of this decision depends solely on the valuer's capability and sophistication to explain and justify his/her assumptions within the valuation report. However, it is also shown that efforts need to be undertaken to improve the description of property assets in transaction databases in order to provide the informational databases necessary to empirically underpin a valuer's decision to assign a “valuation bonus” to a sustainable building or a “valuation reduction” to an unsustainable/conventional one.

The paper postulates that valuation reports should be extended to include the following additional elements: a clear description of the availability of certain sustainability‐related property characteristics and attributes; a statement of the valuer's opinion about the benefits of these characteristics and attributes; and a statement of the valuer's opinion about the impact of these benefits and/or risks on property value.

Looks at the philosophy of valuation, explaining the distinction between “worth” and “price”. Attempts to explain traditional techniques of assessing price. Looks at the development of discounted cash flow and its applications in valuations and calculations of worth. Concludes that there must be more openness with clients about valuation risks and issues so that they can make informed judgements.

Responds to “A note on ‘The initial yield revealed: explicit valuations and the future of property investment’” published in an earlier issue of the Journal of Property Valuation & Investment. Addresses issues raised and develops and extends the organizations of the original paper, in particular: definitions of certain concepts; the determination of value; the need for explicit valuations; price formation in the property market; and the influence of valuation on price. Reiterates the purposes of the original worked example of valuations; produces a corrected version; and in an appendix presents extended solutions and a fuller discussion of the central issues.

The majority of institutional investors in Germany use the German income approach (GIA) while investors abroad prefer the discounted cash flow (DCF). The debate around the two methods has been largely theoretical, lacking large-scale empirical evidence. The paper aims to discuss this issue.

The analysis consisted of a performance comparison and hedonic regressions based on ordinary least squares. Fitted GIA and DCF values were obtained for all observations in the data set in order to eliminate distortions caused by different property characteristics in the two valuation sub-samples.

The research hypothesis, stating that the two methods result in statistically identical estimations of value, was rejected. The performance analysis showed that GIA valuations displayed smoother total return performance due to less volatile capital growth in comparison to DCF valuations. Comparing the fitted values obtained from the regressions showed that GIA valuations were on average lower than their DCF counterparts. The difference was small and both methods resulted in very similar fitted values. The difference between fitted values was not constant over time and decreased toward the end of the analysis period.

The research adds empirical arguments to the ongoing debate between GIA and DCF valuations. So far empirical proof has been scarce or one-sided.

This analysis is the first large-scale empirical comparison of the DCF and the GIA within the same market.