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Calculate property value internationally
The international calculation of property values can be complex. Different markets, laws, and valuation methods make precise valuation difficult. Learn how Auctoa helps you with AI-supported expertise to determine the optimal value and make informed decisions. Do you need personal advice? Contact us here.
The international property valuation requires a differentiated consideration due to varying valuation standards and influencing factors. An accurate analysis is crucial to avoid misjudgments.
The Baulandmobilisierungsgesetz in Germany and an active municipal land policy are important instruments for promoting land development and for stabilising land prices. Municipalities can reduce land prices by up to 10% through interim acquisition models.
Technological Developments such as AI and GIS as well as sustainable planning approaches are shaping the future of property valuation. The use of these technologies can improve the accuracy of valuations by up to 15%.
The Significance of Property Value Assessment in a Global Context
Property value assessment is a complex process that becomes even more challenging in an international context. Different valuation methods, standards, and influencing factors make it essential to adopt a global perspective to avoid misjudgments. For investments and cross-border transactions, an accurate valuation is crucial. The appreciation of real estate is highly dependent on local conditions, which must be taken into account.
Why is an International Perspective Important?
An international perspective is crucial for several reasons. Firstly, there are different valuation methods and standards in various countries. What is considered standard in one country may be completely unusual in another. Secondly, the influencing factors vary significantly from country to country and region to region. For instance, political stability, economic development, and cultural characteristics can affect property value. Thirdly, an international perspective is essential for investments and cross-border transactions because investors and companies need to ensure they know the true value of a property before making a decision.
Article Objective
This article offers you a comprehensive guide to precise property valuation worldwide. We provide an overview of the key aspects of international property value assessment, highlight the challenges and peculiarities of different markets, and explain the significance of the Land Mobilisation Act in Germany. Our goal is to equip you with the necessary knowledge to accurately calculate international property value and avoid costly mistakes.
What Will Be Covered?
The focus is on international valuation standards, which aim to ensure comparability. We also analyse the factors influencing property value, which can vary by region. Special attention is given to the Land Mobilisation Act in Germany and its impact on property development. Finally, we provide you with practical tips and solutions for international land development.
General Valuation Methods
The property valuation is based on various methods that are applied depending on the type of property and the purpose of the valuation. The most common methods include the comparative value method, the income value method, and the asset value method. Each of these methods has its advantages and disadvantages and is better suited to certain types of real estate. It is important to understand the differences between these methods to make an informed decision. Valuing properties is a complex process that requires expertise.
What methods are available?
The comparative value method is based on comparing the property to be valued with similar properties that have recently been sold. This method is particularly suitable for properties in residential areas where there is a sufficient number of comparable objects. The income value method, on the other hand, focuses on the future income that the property can generate. This method is often used for commercial properties and rental properties. The asset value method determines the value of the property based on the costs that would be incurred in constructing an equivalent building on the property. This method is often used for special properties or properties without comparable objects.
International Valuation Standards
To ensure a comparable and transparent property valuation, there are international valuation standards. The most important standards are the IVS (International Valuation Standards) and the RICS (Royal Institution of Chartered Surveyors). These standards set the framework for valuing properties and ensure that valuations are understandable and objective. Adhering to these standards is particularly important in international transactions to create trust and security.
What standards are relevant?
The IVS (International Valuation Standards) are a globally recognised standard for real estate valuation. They are issued by the International Valuation Standards Council (IVSC) and provide a comprehensive framework for valuing all types of real estate. The RICS (Royal Institution of Chartered Surveyors) is a British professional organisation for real estate experts. It has developed its own valuation standards, which are recognised in many countries. Both standards emphasise transparency, objectivity, and comprehensibility of the valuation.
Factors Influencing Property Value
The property value is influenced by a variety of factors. The most important factors include location and infrastructure, development possibilities and restrictions, market development and interest rates, as well as legal framework conditions. These factors can vary in influence depending on the country and region and must be considered in the valuation. Property analysis is crucial to identify all relevant factors.
What factors play a role?
The location and infrastructure are decisive factors for the property value. Good connections to the transport network, proximity to schools, shopping facilities, and public amenities, as well as the quality of the residential area, can significantly increase a property's value. The development possibilities and restrictions are determined by the development plan and other legal regulations. Generally, the more development opportunities a property offers, the higher its value. The market development and interest rates affect the demand for properties and thus the prices. In times of low interest rates and high demand, property prices tend to rise. The legal framework conditions, such as the land mobilisation law, can also have a significant impact on property value.
Goals and Key Points of the Act
The Land Activation Act aims to accelerate the activation of building land and promote the construction of affordable housing. A central point is the strengthening of the role of municipalities to enable faster utilization of unused land for housing construction. The Act incorporates various instruments and measures aimed at improving the framework conditions for land development. The key points of the Land Activation Act focus on the faster activation of building land and increasing the supply of affordable housing by strengthening the municipalities' capacity to act.
What is the goal of the Act?
The primary aim of the Act is to achieve faster activation of building land to counteract the housing shortage. Another goal is the promotion of affordable housing, particularly in areas with strained housing markets. Through the strengthening of the role of municipalities, these are to be enabled to play a more active role in land development and better assert their own interests.
Main Instruments and Measures
The Land Activation Act relies on various instruments and measures to achieve its goals. These include the strengthening of the municipalities' pre-emption rights, the designation of areas for social housing (temporary), facilitations for building on peripheral areas (§ 13b BauGB, temporary), the new area category "Village Residential Area", and the extension of the ban on converting rented into owner-occupied apartments (temporary). These instruments are intended to give municipalities more opportunities to actively control land development.
What instruments are being deployed?
The strengthening of municipalities' pre-emption rights allows them to acquire land before it is sold to private investors. The designation of areas for social housing is intended to ensure that part of the newly created housing is available to low-income households. The facilitations for building on peripheral areas aim to make it easier to develop areas on the outskirts. The new area category "Village Residential Area" is designed to improve the compatibility of housing and agriculture. The extension of the ban on converting rented into owner-occupied apartments is intended to prevent rental apartments from being transformed into owner-occupied apartments, thus taking them off the rental market.
Critical Analysis and Expert Opinions
The Land Activation Act is not without controversy. Critics complain that the Act does not go far enough to achieve its goals. There are also concerns regarding the balance between property rights and municipal powers. Some experts call for clearer definitions, such as for "strained housing markets," to avoid legal uncertainties. Opinions vary on whether the Act will indeed lead to faster activation of building land and more affordable housing.
What are the points of criticism?
One criticism is that the Act may not be sufficient to achieve its goals, as it provides only limited intervention possibilities into property rights. Another point of criticism is the balance between property rights and municipal powers, as some property owners fear that municipalities could misuse their powers. In addition, there is a demand for clearer definitions to avoid legal uncertainties and ensure uniform application of the Act.
Active vs. Passive Land Policy
The municipal land policy plays a crucial role in land development. There are two fundamental approaches: active land policy and passive land policy. An active land policy aims to actively control and increase the supply of land, while a passive land policy is limited to creating the framework conditions within which private investors can develop land. Active land policy is particularly important in growing cities with a shortage of housing, to stabilize land prices and create affordable housing. The municipal land policy is gaining renewed importance, especially in growing cities facing a shortage of housing.
What approaches are there?
An active approach focuses on increasing supply to provide sufficient building land and dampen land prices. A passive approach, on the other hand, focuses on promoting subsidized housing without actively increasing the overall supply of building land. Active land policy aims to lower land prices by increasing supply, thereby creating affordable housing.
Instruments of Land Development
Municipalities have various instruments of land development at their disposal to implement their land policy. Key instruments include land readjustment, urban development contracts, and interim acquisition models. These instruments enable municipalities to actively control land development and achieve their own objectives. The choice of suitable instruments depends on the specific local circumstances and the goals of the municipality.
What instruments are available?
Land readjustment is a process where plots are reorganized to allow for better construction. Urban development contracts are agreements between the municipality and private investors, setting out the conditions for land development. Interim acquisition models allow the municipality to acquire plots in order to actively control development and prevent speculation.
Co-operative Land Models
Co-operative land models are an important approach to land development. In these models, municipalities and private investors work together to jointly develop land. A key instrument here is urban development contracts, where the conditions for cooperation are set. Co-operative land models can make a significant contribution to affordable housing, but may not achieve sufficient volume effects to sustainably lower land prices.
How do these models work?
In co-operative land models, municipalities and private investors use urban development contracts to set the conditions for land development. These models can make a significant contribution to affordable housing by, for example, setting quotas for subsidized housing. However, they may not achieve sufficient volume effects to sustainably lower land prices, as they are often limited to individual projects.
Different Legal Systems and Planning Procedures
International land development faces a range of challenges. One of the biggest challenges is the different legal systems and planning procedures in various countries. These differences can significantly complicate the planning and implementation of cross-border projects and require in-depth knowledge of local conditions. Land development must adapt to the respective local conditions.
How do these differences affect?
The different legal systems and planning procedures increase the complexity of cross-border projects. Investors and developers need to adapt to local conditions and consider the different regulations and laws. This requires a substantial investment of time and resources and can lead to delays and additional costs.
Speculation and Land Price Development
Another issue in international land development is speculation with land. Speculators purchase land in the hope that prices will rise, contributing to an artificial shortage of supply and rising land prices. To counteract speculation, municipalities can pursue an active land policy, establish land funds, and use interim acquisition models. The development of land should be sustainable and free from speculation.
How can speculation be counteracted?
An active land policy by municipalities can help curb speculation by actively managing and increasing the supply of land. Land funds and interim acquisition models allow municipalities to acquire land and actively manage development. The allocation by concept rather than highest bid ensures that land is not sold to the highest bidder but to the one presenting the best concept for land development.
Sustainable Land Development
Besides legal and economic challenges, sustainable land development is becoming increasingly important. It is crucial to consider ecological aspects in land development and to promote infill development over greenfield development. Additionally, creating mixed-use neighbourhoods where living, working, and leisure are integrated should be a focus.
How can sustainable development be achieved?
Infill development over greenfield development helps reduce land consumption and avoid urban sprawl. Considering ecological aspects, such as protecting green spaces and promoting biodiversity, is important for sustainable land development. The creation of mixed-use neighbourhoods helps improve the quality of life and reduce dependence on cars.
Examples of Successful Land Development in Germany
In Germany, there are numerous examples of successful land development. Cities like Münster, Cologne, Hamburg, Ulm, Offenburg, Berlin, Stuttgart, Düsseldorf, and Heidelberg have adopted various approaches to activate land and create affordable housing. These examples demonstrate that there is no single best approach, but that the choice of appropriate tools depends on the specific local conditions. The analysis of these successful examples can provide valuable insights for other municipalities.
Which Cities are Pioneers?
Münster, for instance, has adopted an active land policy and acquired plots to actively steer development. Cologne has entered into urban development contracts with private investors to promote the construction of affordable housing. Hamburg has established a land fund to secure plots for residential construction. These examples illustrate that there are various ways to successfully develop land.
International Examples
In addition to the German examples, there are also international examples that can serve as models. (Examples from other countries should be inserted here, which are not included in the given research). It is crucial to look beyond Germany’s borders and learn from the experiences of other countries. The international collaboration can provide valuable impetus for land development.
Which Countries can Serve as Models?
(Examples from other countries should be inserted here, which are not included in the given research)
Lessons Learned
Some important lessons learned can be derived from the examples of successful land development. A long-term strategy is essential to effectively manage land development. The collaboration between municipalities and private investors is key to pooling different skills and resources. The adaptation of tools to local conditions is crucial to achieve the best possible outcomes.
What can be Learned from the Examples?
The examples show that a long-term strategy is essential to effectively manage land development. It is important to clearly define the objectives and select the right tools. The collaboration between municipalities and private investors is key to pooling different skills and resources. The adaptation of tools to local conditions is crucial to achieve the best possible outcomes. Each municipality must find its own way to successfully shape land development.
Digitalisation in Property Valuation
Digitalisation is playing an increasingly important role in property valuation. Digital tools such as Geographic Information Systems (GIS), Building Information Modeling (BIM), and Artificial Intelligence (AI) enable more efficient and precise valuation. These technologies can help speed up the process of property valuation and improve the quality of results. The real estate industry is increasingly benefiting from the opportunities digitalisation offers.
What role do digital tools play?
Geographic Information Systems (GIS) allow for the capture, management, and analysis of spatial data. Building Information Modeling (BIM) enables the creation of digital models of buildings and properties. Artificial Intelligence (AI) can be used for the automatic analysis of data and the creation of forecasts. These technologies contribute to automating the process of property valuation and improving the accuracy of results.
Smart Cities and Sustainable Urban Development
The concepts of Smart Cities and sustainable urban development also influence land development. The focus is on resource efficiency and quality of life, the integration of renewable energies, and the promotion of electromobility. These trends require a new approach to land development, considering ecological and social aspects. The demand for undeveloped land, especially from municipalities, underscores the importance of strategic urban development.
How do these trends influence land development?
The focus on resource efficiency and quality of life requires a new approach to land development. It is important to consider ecological and social aspects and to find sustainable solutions. The integration of renewable energies and the promotion of electromobility require appropriate infrastructure and consideration of new technologies.
Outlook on Future Developments
Future developments in land development will be shaped by various trends, including more flexible building forms and usage concepts, the greater consideration of climate adaptation, and participatory planning processes. It is essential to adapt to these changes and develop innovative solutions to meet the challenges of the future.
What are the trends of the future?
More flexible building forms and usage concepts allow for better adaptation to the needs of residents and more efficient use of space. The greater consideration of climate adaptation is crucial for minimising the impacts of climate change. Participatory planning processes enable citizens to actively partake in shaping their environment.
Summary of Key Findings
The international property valuation requires a nuanced consideration of the respective circumstances. The Land Mobilisation Act is an important step, but not the sole solution. Local land policy plays a pivotal role in land development. Sustainable and innovative approaches are needed to meet future challenges. The current positions of the German Association of Cities highlight the importance of a strategic approach.
What are the key messages of the article?
The international property valuation requires a nuanced consideration, as the conditions and influencing factors vary by country and region. The Land Mobilisation Act is an important step, but not the sole solution, as it allows only limited interventions in property rights. Local land policy plays a pivotal role as it can actively shape the conditions for land development. Sustainable and innovative approaches are needed to address future challenges and create a desirable environment.
Outlook and Recommendations
For the future, it is important to strengthen international cooperation, promote research and development, and establish transparent and fair conditions. Only in this way can sustainable and equitable land development be ensured. If you wish to calculate property value internationally, it is advisable to seek professional support to avoid errors and achieve the best possible results.
What should be done?
It is important to strengthen international cooperation to learn from the experiences of other countries and develop common solutions. Promoting research and development is essential to develop innovative technologies and concepts for land development. The creation of transparent and fair conditions is important to build trust and security among investors and citizens.
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Der Deutsche Bundestag provides information on the Land Activation Law.
Der Deutsche Verband für Wohnungswesen, Städtebau und Raumordnung e.V. offers a brochure on the topic "More Building Land, Affordable Housing".
Das Bundesinstitut für Bau-, Stadt- und Raumforschung (BBSR) presents examples of successful land development in Germany.
Das Bundesinstitut für Bau-, Stadt- und Raumforschung (BBSR) provides information on international cooperation in the field of land development.
Der Deutsche Städtetag comments on unused land and strategic approaches.
What are the biggest challenges in international real estate valuation?
The biggest challenges are the different valuation methods and standards in various countries, the varying influencing factors (political stability, economic development), and the complexity of cross-border transactions.
Which international valuation standards are relevant and why?
The key standards are the IVS (International Valuation Standards) and the RICS (Royal Institution of Chartered Surveyors). They ensure comparability, transparency, and objectivity in valuations, which is particularly important for international transactions.
How does the Building Land Mobilisation Act in Germany affect real estate valuation?
The Building Land Mobilisation Act aims to accelerate the activation of building land and promote the construction of affordable housing. This can impact the valuation of properties in Germany, especially in areas with tight housing markets.
What role does municipal land policy play in land development?
Municipal land policy plays a crucial role by actively managing the supply of building land and stabilising land prices. Active measures such as interim acquisition models can counteract speculation.
How can municipalities counteract speculation with properties?
Municipalities can adopt an active land policy, establish land funds, and utilise interim acquisition models. The conceptual allocation instead of highest bidder procedures can also help reduce speculation.
Which technological developments influence real estate valuation?
Digital tools such as geographic information systems (GIS), Building Information Modeling (BIM), and artificial intelligence (AI) enable more efficient and precise valuations.
What are cooperative land models and how do they work?
Cooperative land models are partnerships between municipalities and private investors, governed by urban development contracts. They contribute to affordable housing but may not achieve sufficient volume effects.
What is the significance of sustainable land development?
Sustainable land development takes into account ecological aspects, promotes infill development over greenfield development, and creates mixed-use neighbourhoods to enhance quality of life and reduce land consumption.
