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The International Practice of Statistical Property Valuation Methods and the Possibilities of Introducing Automated Valuation Models in Hungary

Author

Listed:
  • Áron Horváth

    (Head of the ELTINGA Centre for Real Estate Research and research fellow at the Institute of Economics, Centre for Economic and Regional Studies of the Hungarian Academy of Sciences)

  • Blanka Imre

    (PhD student in economics at Universita Bocconi)

  • Zoltán Sápi

    (Analyst at the ELTINGA Centre for Real Estate Research)

Abstract

In the wake of regulatory, information technology and methodological changes, statistical property valuation has gained traction in Hungary. This paper looks at the available methods of appraisal based on the literature. We provide an overview of the advantages and drawbacks of the currently known methods. Based on these, automated valuation models (AVMs) can be readily introduced alongside the estimated median value based methods used so far. For real estate industryspecific reasons, the introduction of parametric hedonic estimates supplemented with spatial correlations can be expected for the time being. The better performance of statistical models would need improved quality of duties office data.

Suggested Citation

  • Áron Horváth & Blanka Imre & Zoltán Sápi, 2016. "The International Practice of Statistical Property Valuation Methods and the Possibilities of Introducing Automated Valuation Models in Hungary," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 15(4), pages 45-64.
    • Handle: RePEc:mnb:finrev:v:15:y:2016:i:4:p:45-64
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    References listed on IDEAS

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    More about this item

    Keywords

    mortgage; collateral valuation; automated valuation model; statistical valuation;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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