Specialised property valuation: Multiple criteria decision analysis

Abstract

The aim of valuation is to achieve the best estimate of the transaction price of property. The market of specialised properties is very diverse as property does not transact sufficiently often to allow the establishment of price by comparison with previously sold assets. This article describes a multiple criteria decision analysis method that can be used for specialised property valuation. This method is based on a market decision-making principle and is in line with the traditional comparative methods. To estimate the property price, information on as little as two comparable properties is required. The method takes into account a number of different criteria, such as qualitative, quantitative aspects and market conditions. In this article, I describe a theoretical model of the method and provide an example of the estimation of price for a specialised property. © 2011 Macmillan Publishers Ltd.