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Considerations Regarding Valuation Of Private Properties Using The Automated Valuation Models Based On Gis

Author

Listed:
  • Droj Laurentiu

    (University of Oradea, Faculty of Economics, Department of Finance and Accounting, Oradea)

  • Droj Gabriela

    (University of Oradea, Faculty of Building and Architecture, Department of Cadaster- Architecture, Oradea, Romania)

Abstract

The current paper deals with an issue of extreme novelty for the property assessment market from Romania: usage of automated valuation models in order to obtain the market value of real estate properties located in Romania. ANEVAR – Asociatia Nationala a Evaluatorilor din Romania in order to fasten the re-assessment of the guarantess owned by the Romanian banks introduces the Methodological Guide - GME 520 and its annexes opening for the first time the discussions about the opportunity of using mass property appraisal procedures and automatic valuation models for properties situated in Romania. The first chapter of the paper deals with the main instrument in mass property appraisal is considered to be the Automatic Valuation Model (AVM). The AVM is using different statistical and mathematical models: regression, neural networks, fuzzy, adaptive estimation in order to estimate the value of a singular property of the value of a set of properties with common characteristics. The annex 2 of GME 520 edited by ANEVAR(2014) considers that the creation of a Automatic Valuation Model (AVM) should be a solution for revaluation of the real estate’s collateral portfolios held by banks. In the literature, there are a lot of different types of Automatic Valuation Model (AVM) based on statistical analyses. However the AVM cannot use the spatial and locational component of the real estate. Since the specialists suggest Geographical Information Systems can be used to improve the accuracy of the Automated Valuation Model (AVM) the second chapter of the paper constructs several elements of a GIS based Computer Assisted Mass Appraisal based on public information from the city of Oradea and tests them in order to obtain the best usage, comparative elements and correction prices for a property situated within the city. At the end of the article and assessment will be made regarding the usage of GIS based CAMA in Romania.

Suggested Citation

  • Droj Laurentiu & Droj Gabriela, 2015. "Considerations Regarding Valuation Of Private Properties Using The Automated Valuation Models Based On Gis," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 380-388, December.
    • Handle: RePEc:ora:journl:v:1:y:2015:i:2:p:380-388
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    More about this item

    Keywords

    property valuation; ANEVAR; Automated Valuation Model(AVM); Computer assisted mass appraisal (CAMA); GIS;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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