The practice of real estate valuation in Portugal

The character of the valuation services offered and their use by clients directly affects the pricing of property assets and the conduct of property markets. More widely, valuation services can affect personal and company finance, banking and investment, investment from overseas the development and construction industries. Poor valuation practice, especially for loan security, has been implicated in property booms leading to unsustainable lending contributing to recession (e.g.UK) or currency crises (e.g.Thailand). Traditional valuation practices vary across the member states of the European Union and in Portugal a wide and confusing range of legal and professional codes cover the service. As in many countries, Portuguese practice appears to be divided between traditional approaches and those adopted by the recent influx of international consultants. Research collaboration between Portugal and the UK is investigating links between valuation practice, business finance and the wider economy. This paper presents the results of a survey of Portuguese valuers conducted with the co-operation of the Portuguese Association of Engineer Valuers (APAE), the leading national professional body covering property valuation. 300 questionnaire forms were distributed to valuers attending the annual APAE conference in November 2000, from which 150 useable responses were obtained. The issues covered by the survey include; requirements for valuations; clients and their instructions; legal and professional codes; concepts of value; methodologies; data sources; education and training. Analysis of the survey returns is currently underway but early indications are that more respondents now tend to capital comparison, rather than cost based methods. Valuers however have limited access to transaction evidence. The paper will present the survey findings and discuss their implications. This paper will be the first ever objective record of valuation services in Portugal and will contribute to the greater understanding of existing valuation practice across Europe.