# Volume 24 (2016): Issue 3 (September 2016)

Journal Details
Format
Journal
eISSN
2300-5289
First Published
16 May 2013
Publication timeframe
4 times per year
Languages
English

8 Articles
Open Access

#### Connection Between Similarity and Estimation Results of Property Values Obtained by Statistical Methods

Published Online: 08 Oct 2016
Page range: 5 - 15

#### Abstract

The article discusses the topic of the application range of statistical methods in estimating property value on the grounds of a comparative approach. The analysis of application effects to estimate the unitary value of properties, respectively similar and dissimilar sets of market properties, by using the method of least squares and a linear price model. The prepared test set was developed from a priori assumed explanatory variable values as well as deterministically specified dependent variables (simulated prices) which were subjected to additional modification by a random factor. On the basis of the prepared set and series of accounting experiments, the estimation effects of any property out of a tested set were analyzed, understood as the determination of the value of the function of explanatory variables in the way of extrapolation or interpolation of values describing these variables. The experiments carried out show that the estimation of an explanatory variable for a random property out of a set of elements serving as the estimation base can be reliable only when it is related to the interpolation in the set of explanatory variables of this base. The application as an estimation base – a set in relation to which explanatory variables of the estimated property exceed the limits of corresponding variables, requires the completion of a basic set with records describing properties similar or close to the estimated property so that the values of explanatory variables for the estimated property are contained in the appropriate subsections of values of corresponding explanatory variables of the basic set.

The paper refers to the issue of defining property market value indicating, by the prism of conducted experiments, that the estimation results obtained by means of statistical methods do not always meet the requirements of the statutory definition of market value, and hear rather in the direction of a result corresponding to the so-called “desk appraisal” result.

#### Keywords

• similarity
• data models
• data selection

• R15
• C15
• C51
Open Access

#### A Modified Model to Estimate Building Rental Multipiers Accounting for Advalorem Operating Expenses

Published Online: 08 Oct 2016
Page range: 16 - 26

#### Abstract

To develop ideas on building element valuation contained in the first article on the subject published in REMV, we propose an elaboration of the approach accounting for ad valorem expenses incidental to property management, such as land taxes, income/capital gains tax, and insurance premium costs; all such costs, being of an ad valorem nature in the first instance, cause circularity in the logic of the model, which, however, is not intractable under the proposed approach. The resulting formulas for carrying out practical estimation of building rental multipliers and, in consequence, of building values, turn out to be somewhat modified, and we demonstrate the sensitivity of the developed approach to the impact of these ad valorem factors. On the other hand, it is demonstrated that (accounting for) building depreciation charges, which should seemingly be included among the considered ad valorem factors, cancel out and do not have any impact on the resulting estimates. However, treating the depreciation of buildings in quantifiable economic terms as a reduction in derivable operating benefits over time (instead of mere physical indications, such as age), we also demonstrate that the approach has implications for estimating the economic service lives of buildings and can be practical when used in conjunction with the market-related approach to valuation – from which the requisite model inputs can be extracted as shown in the final part of the paper.

#### Keywords

• market value
• valuation
• buildings
• income
• rental multiplier
• land
• taxes
• discounting

• R30
• D03
• D40
Open Access

#### Research and Application of Remote Sensing and GIS Technologies in Determining and Forecasting Land Use Changes by Markov Chain in Y Yen District - Nam Dinh Province

Published Online: 08 Oct 2016
Page range: 27 - 39

#### Abstract

The land's natural resources are invaluable and a requisite for the existence and development of humans and other organisms on Earth. In recent years, under the strong impact of new directions in economic and social development, the demand for land has been increasing. The percentage of land used for residential living, transportation, irrigation and infrastructure tends to increase, while the share of agricultural land is continuously decreasing. Consequently, the allocation and efficient use of land is one of the most important concerns in order to enable sustainable development, environmental protection and ecology. Therefore, research to determine the volatility and changing trends in land use is necessary. This study uses remote sensing and GIS technology, combined with the Markov Chain to determine variation and forecast the changes in land use in the Y Yen district of the Nam Dinh province of Vietnam. This will create a basis for helping land managers grasp the situation in local land use management.

#### Keywords

• ErDAS
• GIS
• MARKOV CHAIN
• Remote Sensing
• Land
• Land use change

• R14
Open Access

#### Information Capacity Database in the Rating Model on the Basis of Polish and Italian Real Estate Markets

Published Online: 08 Oct 2016
Page range: 40 - 51

#### Abstract

Preliminary data analyses in decision-making systems and procedures are very important for numerous reasons, in particular because the accumulation and analysis of large data sets is costly and time-consuming. The effective use of decision support systems, including on the real estate market, requires the elimination of noise. The authors have proposed to eliminate redundant data with the use of the modified method for evaluating the capacity of the data set, which is applied in the process of classifying the condition of real estate markets. The proposed procedure (subsystem) is an attempt to improve the effectiveness of analyses relating to the development of methods for rating real estate markets. The proposed solutions will be simulated on the example of leading real estate markets in Poland and Italy.

#### Keywords

• decision-making systems
• highest integral information capacity
• real estate market rating

• B41
• C10
• D80
• R31
Open Access

#### Study of Customer Satisfaction with Living Conditions in New Apartment Buildings

Published Online: 08 Oct 2016
Page range: 52 - 70

#### Abstract

The article aims to analyze the Lithuanian housing market and to look into the satisfaction of people with living conditions in new apartment buildings on this market. The article presents the concept of customer satisfaction in construction and the criteria that define the quality of dwellings; the benefits, consequences, merits and demerits of the assessment of customer satisfaction are also named. A survey of customer satisfaction helped to evaluate the quality of dwellings according to their technical and functional parameters, as well as the degree of cooperation between customers and contractors/builders. The customer satisfaction index (CSI) and the degree of loyalty were calculated, and then a customer satisfaction matrix was built up.

#### Keywords

• customer satisfaction index
• construction quality
• real estate market

• A10
• R29
• R30
Open Access

#### The Essence of Equivalent Markets in Determining the Market Value of Land Property for Variable Planning Factors

Published Online: 08 Oct 2016
Page range: 71 - 82

#### Abstract

The leading local legislation act defining the spatial policy is the local development plan, the financing of which is the commune’s responsibility. The beneficiary of activities aimed at the transformation of the intended property use is its owner or its perpetual lessee – with lessees incurring the costs of adopting the local development plans through so-called zoning fees, the amount of which, often controversial, has become the source of numerous lawsuits. The presented problem of an outside-business and often radical change of land value corresponds to the market dilemmas in determining equivalent markets, and establishing price-setting factors and their impact on the value of real estate.

Circles of analysts and appraisers determine equivalent markets radially. This means that the analyzed or valued property is the central point of the monitored area, incorrectly “enclosed” within the geometry of a circle. Such a perception of the dispersion of transaction prices does not reflect the actual nature of the market, as evidenced by the analyses of land property values according to their planning factors, carried out as part of the present paper.

The focal point of the article is a continuous map of land value developed for properties located within the cadastral unit of Podgórze of the city of Krakow which indicates that it is not legitimate to arbitrarily take on the radial approach when designating equivalent markets, which was indirectly approved by Waldo Tobler claiming that: “Everything is related to everything else, but near things are more related than distant things” (Tobler 1970).

#### Keywords

• equivalent markets
• fields of value
• property valuation
• zoning fee

• D47
• L85
• R14
• R52
• R58
Open Access

#### Grey Zone in the Real Estate Market

Published Online: 08 Oct 2016
Page range: 83 - 92

#### Abstract

The grey area exists in all countries of the world. It is visible in various areas of activity, which means that it is widespread. It is a sign of the weak state institutional structures and overregulation of the economy. Traces of it are also visible on the real estate market. This paper argues that the size of the shadow economy in the real estate market is significantly undervalued. For this purpose, areas of its occurrence which had not been included in previous estimates were indicated, prepared by the Central Statistical Office and the Gdansk Institute for Market Economics. Two ways of tracking the grey zone were used: press reports and case studies.

#### Keywords

• grey economy
• informal economy
• real estate market

• R30
• L85
Open Access

#### Some Aspects of Local Real Estate Taxes as an Instrument of Land Use Management

Published Online: 08 Oct 2016
Page range: 93 - 105

#### Abstract

Economic and financial instruments are a very important group of tools for supporting local entrepreneurship. The broadest group among them are local taxes. Real estate taxes are considered by local governments, on the one hand, as a tool for promoting the effective development of real estate, and on the other, as a reliable source of income to the local budget.

The functioning of every tax system can be analyzed by applying different criteria. The most typically evaluated criteria are: economic efficiency, equity, transparency, collectability and revenue production. These criteria are often in conflict with one another, one of the reasons for this fact being, according to the research conducted by the authors of this paper, the base of taxation. It is generally believed that the value of real property is a much more reliable tax basis than its size.

It was our intention to verify this opinion. Having reviewed the available literature and thoroughly analyzed the Polish and Belarussian real estate tax systems, we concluded that the first of the two systems has no definite advantages over the other. For example, the ad valorem tax better stimulates intensive use of land, but, on the other hand, may negatively affect its sustainable development. The main reason for this fact is the specificity of real estate as the object of taxation. The object of taxation exists regardless of its economic state and performance, thus taxes have to be paid whether or not there is any income or profit. Given the nature and possible functions of real estate and the priorities of local authorities, the concept of just taxation is also socially relative.

#### Keywords

• real estate
• local taxes
• community budget
• market value
• land use management

• K34
• O21
• R00
• R28