CONSIDERATIONS REGARDING VALUATION OF PRIVATE PROPERTIES USING THE AUTOMATED VALUATION MODELS BASED ON GIS

Droj Laurentiu () and Droj Gabriela ()
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Droj Laurentiu: University of Oradea, Faculty of Economics, Department of Finance and Accounting, Oradea
Droj Gabriela: University of Oradea, Faculty of Building and Architecture, Department of Cadaster- Architecture, Oradea, Romania

Annals of Faculty of Economics, 2015, vol. 1, issue 2, 380-388

Abstract: The current paper deals with an issue of extreme novelty for the property assessment market from Romania: usage of automated valuation models in order to obtain the market value of real estate properties located in Romania. ANEVAR – Asociatia Nationala a Evaluatorilor din Romania in order to fasten the re-assessment of the guarantess owned by the Romanian banks introduces the Methodological Guide - GME 520 and its annexes opening for the first time the discussions about the opportunity of using mass property appraisal procedures and automatic valuation models for properties situated in Romania. The first chapter of the paper deals with the main instrument in mass property appraisal is considered to be the Automatic Valuation Model (AVM). The AVM is using different statistical and mathematical models: regression, neural networks, fuzzy, adaptive estimation in order to estimate the value of a singular property of the value of a set of properties with common characteristics. The annex 2 of GME 520 edited by ANEVAR(2014) considers that the creation of a Automatic Valuation Model (AVM) should be a solution for revaluation of the real estate’s collateral portfolios held by banks. In the literature, there are a lot of different types of Automatic Valuation Model (AVM) based on statistical analyses. However the AVM cannot use the spatial and locational component of the real estate. Since the specialists suggest Geographical Information Systems can be used to improve the accuracy of the Automated Valuation Model (AVM) the second chapter of the paper constructs several elements of a GIS based Computer Assisted Mass Appraisal based on public information from the city of Oradea and tests them in order to obtain the best usage, comparative elements and correction prices for a property situated within the city. At the end of the article and assessment will be made regarding the usage of GIS based CAMA in Romania.

Keywords: property valuation; ANEVAR; Automated Valuation Model(AVM); Computer assisted mass appraisal (CAMA); GIS (search for similar items in EconPapers)
JEL-codes: C15 C31 C63 G30 G32 (search for similar items in EconPapers)
Date: 2015
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