Property Valuations Crucial in a Changing Market
Property valuation will always be at the centre of the storm when markets change, particularly when they change rapidly as we are seeing here in Cyprus.
The regulatory, accounting and commercial environments surrounding property valuations are changing rapidly, impacting all disciplines, whether you’re a practitioner, client or a bank/financial institution.
The minimum requirements for new report standard from RICS is more comprehensive and includes, among others, information on benchmarks and comparable data, property analysis, justification of estimations, and overall provide a lot more information and clarity.
Valuation uncertainly is another issue that can be found in markets where there is no activity, as there is not enough evidence to benchmark and record a value based on comparables.
However, as suggested recently by Mr Philip Farrell, FSCSI, Chief Executive Officer, Real Estate Alliance, Ireland during a recent seminar, you can indeed use other evidence to obtain true market value.
For instance, asking prices, comparables of other cities or even countries, industry trends, indexes, key market economical data, global financial and lending conditions. Generally, the practitioner should also have a good feeling of the market, being active in the market! Issues such as financial stress testing related valuations, regulatory developments, lending, real estate finance, ethical and responsible professionalism were also at the core of discussions during the seminar. Certainly it seems there is already an improvement in all these areas here in Cyprus.
Insights into specific issues impacting real estate valuations are no doubt fundamental, and now more than ever a priority. Whether you’re a practitioner, client or anyone with an interest in property valuations, being better informed on how to address these new challenges is a must, including awareness, education, processes and professional development requirements and opportunities.
Written by Managing Partner, Urban Keys Real Estate Chartered Surveyors, Lambros Kaloyirou MRICS