The TEGoVA Assembly discussed the issue of how to apply the comparative method on markets where, sales price information is not available and if EVS could provide any leeway for using asking prices in some circumstances.
An Investigation into the use of Comparable Evidence in Property Valuation was commissioned. Professor Nick French was asked to undertake a report on Comparable Evidence in Property Valuation.
The brief for this report was to identify the role that comparable evidence plays in property valuation and how the availability and use of comparable evidence varies between different countries and jurisdictions across Europe. And how this, in turn, should inform TEGoVA when setting the European Valuation Standards (EVS).
His research, based on his vast knowledge and experience and on a questionnaire shows that in Europe we have serious divergences in market transparency, not a difference in ‘valuation culture’. Instead, the research shows a strong correlation between the degree of resort to other intelligence than sales comparables and the degree of – often State-imposed – property market opacity. For Professor French, this has consequences ...
“This implies that international valuation standards should not be over-prescriptive in codifying the appropriate use of comparable evidence as each data source could play a lesser or greater role depending upon the transparency of the country in question.”
“Each country will have a different hierarchy of comparable evidence and the fact that different countries use different sources of comparison as their principal signpost for determining market value is a natural consequence of varied market practices. Difference does not equate with less rigour. Ultimately, a property valuer will seek out the best comparable evidence available within their market and provide a rigorous and professional judgement of the market value of the subject property.”
The full report is available to view on the below link.