COMPARATIVE APPROACH APPLICATION IN VALUE ASSESSMENT OF LAND AREAS IN LITHUANIA

• Published in: VADYBA Vol. 30; no. 1; pp. 67 - 72
• Main Authors: Navickas, Valentinas, Šaudys, Audrius, Jegelavičiūtė, Rusnė
• Format: Journal Article
• Language: English
• Published: Lietuvos verslo kolegija 2017; Lithuania Business University of Applied Sciences
• Subjects: Financial Markets; National Economy; Social Sciences; value of land areas; market value; real estate; comparative approach; assessment methodology
• ISSN: 1648-7974; 2424-399X

Real estate industry is of great importance in development of economy of a country. Real estate value determination, including land areas, is one of the problematic fields. Correct valuation of real estate value is relevant in the financial services sector, insurance and lease companies as well as construction sector, agencies that sell properties, institutions that manage the Real Estate Register, it is also important for citizens who purchase and sell their real estate. Current valuation methods solely specifies requirements for application of the comparative approach – to evaluate time, place and other conditions expressing differences between the valued property and analogous or similar properties. This definition does not reflect the totality of criteria to be evaluated when estimating the value of the property. It should be noted that one of the most important factors of value substantiation is selection of totality of criteria applied in object value calculation, evaluation of the criteria (sub criteria) and interpretation of obtained results. In absence of exhaustive, reliable and continuous research identifying the criteria and importance thereof in calculation of the value, appraiser refer to expert valuation that is acceptable and applicable in calculation of real estate value, but has both advantages and disadvantages. The research carried out by the authors discloses that current data collected by the State Enterprise Centre of Registers are not sufficient and suitable for formation of methodology based on a data base. Lack of data about market transactions, quality and exhaustiveness thereof prevents reliable application of methods based on analysis of factual data. For this reason expert valuation remains as priority method for calculation of real estate value using the comparative approach. Therefore application of continuous research identifying criteria influencing the market value of real estate is recommended in the future, as well as preparation of valuation methodology for real estate valuation in consideration of analysis of data located at data bases of the Real Estate Register.