Are you facing the complex task of determining the true value of a property? Given volatile markets and new regulations, an accurate appraisal is crucial. Discover the biggest challenges in valuations and how to overcome them with well-founded strategies and digital tools.
Chat with ImmoGPT for free now.
With access to Google, BORIS, and Deep Research.
The topic briefly and concisely
Unrealistic price expectations and market volatility require transparent, data-driven valuation approaches.
New laws (property tax, EVS 2025) and ESG criteria significantly increase the complexity of property valuations.
Digital tools and AI-powered systems are crucial for ensuring data quality and making evaluation processes efficient.
How do you ensure your property valuation withstands current market realities and complex legal requirements? An accurate and comprehensible valuation is the foundation of every successful property transaction, whether for heirs, owners, or professional investors. This article highlights the key challenges in valuations and presents practical solutions for them.
The essentials at a glance: Property valuation faces unrealistic expectations, market volatility, new legal frameworks such as the property tax reform and the European Valuation Standards (EVS) 2025, as well as the growing influence of ESG criteria. A data-driven, transparent approach and the use of digital tools are essential to overcome these obstacles and accurately determine the value of your property. Learn how to avoid valuation errors and make informed decisions.
Market Dynamics and Owner Expectations: Bridging the Gap
One of the most common challenges in valuations is the often inflated price expectations of property owners. These misjudgements can be based on emotional attachment or outdated market information, which can prolong the sales process by an average of 15-20%. Fact-based transparency is key here. Unrealistic price expectations can thus be corrected early on.
In a volatile market, characterised by interest rate fluctuations and changing demand patterns, a reliable price assessment becomes even more difficult. Property prices in some German metropolitan regions showed fluctuations of up to 10% last year. A multi-layered valuation approach that combines various methods and incorporates up-to-date market data is therefore essential. This way, price ranges rather than fixed values can be communicated, better reflecting uncertainties. The use of digital tools can help efficiently analyse market data and create forecasts. These dynamic factors require continuous adjustments to valuation models.
Regulatory changes: Property tax and EVS 2025 in focus
The reform of the property tax presents a significant challenge in valuations as it requires a reassessment of over 36 million economic units in Germany. General assessment rates of the federal model can lead to deviations from the actual value, which in individual cases can exceed 40%. This highlights the need for individual appraisals to avoid a potentially excessive tax burden. Professional property appraisals are gaining importance here.
Additionally, on 1 January 2025, the new European Valuation Standards (EVS 2025) will come into force. These standards respond to market developments and EU law, particularly in the areas of energy efficiency and sustainability. The EVS 2025 introduce a new ‘property value’ based on ‘cautious and conservative valuation criteria’, which is particularly relevant for property financing. Taking these new standards into account is essential for a correct valuation. Adapting to these detailed requirements requires specialised knowledge and up-to-date training for valuers. The complexity increases, but so does the comparability and quality of valuations across Europe.
Sustainability and ESG criteria: The value of green properties
The impact of sustainability and ESG criteria (environmental, social, governance) on real estate values is an increasing challenge in valuations. Studies show that “green” office buildings can achieve up to 15% higher rents and sales prices. The building sector in Germany accounts for around 35% of final energy consumption and about 30% of CO2 emissions. The EU taxonomy and the Corporate Sustainability Reporting Directive (CSRD) are tightening the requirements. Valuation uncertainties due to ESG need to be minimized.
The energy efficiency class and the energy source of a property directly affect the rental offers and purchase prices. An empirical study evaluated around 204,000 listings and showed clear correlations. Properties with poor energy efficiency are increasingly subject to a “brown discount”, i.e., a value depreciation. ESG ratings are becoming a crucial factor for investment decisions and long-term value retention. Integrating these factors into valuation models is complex but necessary. The following aspects must be considered:
Energy certificate and renovation requirements
Construction materials used and their ecological footprint
Certifications (e.g., DGNB, LEED, BREEAM)
Adaptability to climate change
Social aspects such as accessibility and user comfort
Transparent corporate governance of the owner/manager
These factors require detailed data analysis and forward-thinking consideration.
Data Quality and Digitalisation: The Foundation of Accurate Assessments
The availability and quality of data is a fundamental challenge in valuations. A sound analysis requires at least five to seven comparable properties that have actually been sold. Missing or non-transparent market data, especially for special or unique properties, significantly complicates the application of the comparative value method. Common valuation errors often arise from inadequate data.
Digital tools and AI-supported systems, such as those offered by Auctoa, can provide a solution here. They allow access to broad data pools, automate parts of the valuation process and increase efficiency by up to 30%. The use of standardised processes and digital tools minimises time investment and improves accuracy. The challenge lies in the intelligent linking and interpretation of the data. Continuous maintenance and updating of databases is crucial for reliability. The ImmoGPT chat by Auctoa, for example, can help you quickly address initial questions about data conditions.
Special properties and a lack of comparable data: Creative solution approaches
The valuation of special properties, for which there are few or no direct comparables, presents a particular challenge in valuations. This applies, for example, to historical buildings, niche commercial properties, or very individual luxury properties. Classic comparative value methods, which are based on at least 3-5 similar transactions, often fail here. Identifying valuation obstacles is the first step.
In such cases, modular valuation systems and a detailed application of the cost approach are required. The property is broken down into its components (land, building substance, amenities), and their respective values are determined. A methodologically justified premium or discount for unique features is often necessary. The challenge lies in quantifying these premiums and discounts objectively and transparently. The following approaches can help:
Analysis of cost indicators for similar building components.
Consultation with specialists for the particular property type.
International market comparisons, if national data is lacking.
Development of a "Feature-Value-Matrix" to quantify special characteristics.
These demanding valuations require high expertise and often an interdisciplinary approach.
Conclusion: Proactive strategies for value-driven decisions
The challenges in valuations are diverse and constantly evolving. From market volatility and regulatory changes to the megatrend of sustainability – a precise real estate valuation requires comprehensive expertise and up-to-date data. Digitalisation offers enormous opportunities here to make processes more efficient and increase accuracy. A well-founded, neutral valuation protects against poor decisions and maximises your outcomes.
Auctoa supports you as a digital partner with AI-supported valuations and strategic advice to meet these challenges. Request your offer for a professional real estate valuation now without obligation or use our ImmoGPT chat for initial guidance. Make informed decisions based on transparent and data-supported values.
herausforderungen-bei-bewertungen
Additional useful links
The Federal Statistical Office offers comprehensive data on construction prices and the real estate price index.
The Deutsche Bundesbank provides detailed statistics on the residential real estate market.
PwC publishes reports on emerging trends in the real estate industry.
ZIA and EY present a study on digitalisation and the potential of AI in the real estate sector.
vdpResearch offers a PDF document on digitalisation in real estate valuation.
PwC delivers a report on the incorporation of ESG factors in real estate valuation.
The ifo Institute conducts a survey among economic experts on the expected global house price developments.
Pfandbrief.de provides information on residential real estate finance.
FAQ
Why is a professional property valuation so important?
A professional appraisal provides an objective, market-based value and forms the foundation for important decisions such as purchasing, selling, financing, or inheritance settlements. It minimizes risks and helps avoid financial disadvantages due to misjudgments.
What documents are required for a property valuation?
Typically, a land register extract, site plan, building plans, calculation of living space, energy performance certificate, proof of modernisations, and for rented properties, tenancy agreements and utility bills are required.
How long does a property valuation take?
The duration depends on the complexity of the object and the availability of the documents. An initial online assessment may take a few minutes, while a detailed report can take several days to weeks.
What does a property valuation by Auctoa cost?
The costs for an appraisal are individual and depend on the scope and type of the property. Contact us for a non-binding offer tailored to your specific needs.
How does Auctoa take into account the current challenges with assessments?
Auctoa uses AI-driven analytics, current market data, and takes into account the latest legal requirements as well as ESG factors to create precise and forward-looking evaluations. Our ImmoGPT chat also provides quick answers to your questions.
Can I assess the value of my property myself?
A self-assessment can provide an initial indication, but it carries the risk of misjudgments due to a lack of market knowledge or emotional bias. For a reliable valuation, a neutral expert assessment is recommended.
