Controversy over the Market Value of Real Property as an Institution

Andrzej Reszke () and Lucjan Czechowski ()
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Andrzej Reszke: Uniwersytet Gdański
Lucjan Czechowski: Uniwersytet Gdański

World of Real Estate Journal (Swiat Nieruchomosci), 2017, issue 99, 5-8

Abstract: The standard theory of the market value of real property, agreed and accepted by the International Valuation Standards Committee (IVSC) is based on neoclassical assumptions of perfect competition. In fact, conditions such as the availability of players for free and complete market information are never satisfied. This situation is particularly visible in the real estate markets. This leads to considerable variation of transaction prices even on property of similar type, which leads to the formation of transaction costs related to uncertainty and the lack of trust among market participants. A look at the market value and the process of its valuation as an institution within the meaning of the so-called new institutional economics (NIE) can promote solving these problems. However, this requires undertaking targeted research to define and refine the principles of valuation.

Keywords: real estates; market value; new institutional economics (search for similar items in EconPapers)
JEL-codes: B52 D46 R30 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:kra:journl:y:2017:i:99:p:5-8

DOI: 10.14659/worej.2017.99.01

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