Behavioural aspects of property market value. Implications for the presentation of valuation results

Piotr Jarecki and Ewa Kucharska-Stasiak

ERES from European Real Estate Society (ERES)

Abstract: The paper examines the behavioural aspects of the market value concept in property valuation. The following research hypotheses are considered: (I) decision-making, pricing, valuation, and value in the real estate market form a behavioural chain whose links influence each other; (II) the current definition and interpretation of market value omit the behaviour of the real estate market participants; (III) the current definition and interpretation of market value also omit the special characteristics of real estate and the conditions under which real estate transactions are made, including risk and uncertainty.To allow for the behavioural aspects of the market value of properties, we propose (a) extending the current definition of a market value to include risk and uncertainty and (b) highlighting the need to continue the discussion on changing the presentation and interpretation of the valuation result.The paper has been prepared based on the results of (I) a critical analysis of the pertinent literature and (II) a survey of property valuers to assess their awareness of the behavioural aspects of valuations and views on the presentation of their outcomes.

Keywords: Behavioural Economics; Market Value; Property Valuation; Uncertainty (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2024-01-01
New Economics Papers: this item is included in nep-hme and nep-ure
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