Mass valuations
| DOI | https://doi.org/10.1108/JPIF-01-2016-0001 |
| Date | 07 March 2016 |
| Pages | 191-204 |
| Published date | 07 March 2016 |
| Author | Richard Grover |
| Subject Matter | Property management & built environment,Real estate & property,Property valuation & finance |
EDUCATION BRIEFING
Mass valuations
Richard Grover
School of Built Environment, Oxford Brookes University, Oxford, UK
Abstract
Purpose –The purpose of this paper is to review the issues involved in the implementation of mass
valuation systems and the conditions needed for doing so.
Design/methodology/approach –The method makes use of case studies of and fieldwork in
countries that have either recently introduced mass valuations, brought about major changes in their
systems or have been working towards introducing mass valuations.
Findings –Mass valuation depends upon a degree of development and transparency in property
markets and an institutional structure capable of collecting and maintaining up-to-date price data and
attributesof properties. Countriesintroducing mass valuation mayneed to undertake work on improving
the institutional basis for this as a pre-condition for successful implementation of mass valuation.
Practical implications –Although much of the literature is concerned with how to improve the
statistical modelling of market prices, there are significant issues concerned with the type and quality
of the data used in mass valuation models and the requirements for successful use of mass valuations.
Originality/value –Much of the literature on mass valuation takes the form of the development of
statistical models of value. There has been much less attention given to the issues involved in the
implementation of mass valuation.
Keywords Land registration, Accuracy, Cadastre, Explicability, Mass valuation/appraisal,
Richness of data
Paper type General review
Definitions and terms
Traditionally clients have commissioned valuers to carry out valuations of an
individual property or of a portfolio of properties[1]. However, there are circumstances
in which large numbers of valuations are needed over a relatively short time, most
commonly when a government seeks to levy value-based (ad valorem) recurrent
(annual) property taxes. Fairness requires that all properties are assessed on the same
basis using the market conditions prevailing at a single point in time. The costs and
human resources required to carry out large numbers of valuations over a short period
of time has led to the search for ways of automating the valuation process and the
development of methods of mass valuation.
Mass valuation[2] is the term given to the valuation of large numbers of properties
for the same purpose at the same time, usually at a low cost per property (Goudemans
and Almy, 2011, p. 1). It is the “systematic appraisal of groups of properties using
standardized procedures”(Kauko and d’Amato, 2008, p. 2). The International Valuation
Standards Committee (as it then was) defined mass valuation[3] as “the practice of
appraising multiple properties as of a given date by a systematic and uniform
application of appraisal methods and techniques that allow for statistical review and
analysis of results”(I.V.S.C., 2005). The key element in these definitions is that mass
valuation, as the name suggests, is about the simultaneous valuation of large numbers
of properties using consistent processes and approaches.
As Goudemans and Almy (2011) note, mass valuation is characterised by
standardised procedures, the use of common data, and statistical testing of the models.
Journal of Property Investment &
Finance
Vol. 34 No. 2, 2016
pp. 191-204
©Emerald Group Publis hing Limited
1463-578X
DOI 10.1108/JPIF-01-2016-0001
Received 3 January 2016
Accepted 4 January 2016
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1463-578X.htm
191
Mass
valuations
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