THE MARKET-BASED REGIONAL INDICATOR IN THE COST APPROACH TO VALUATION

key words: cost approach, regional indicator

Summary:

According to the Act on real property management, replacement value of the property is determined in the cost approach. The estimated value of the developed land property in the cost approach takes into account, inter alia, the replacement cost of the building which based on pricebooks of works. Pricebooks contain calculated unit prices and rates related to various Polish regions. Therefore, the replacement cost is corrected using the regional indicator.
The author has defined the market-based regional indicator that results from reference the replacement cost to the transaction data of properties. The article presents an algorithm for the estimation of the market-based regional indicator. The presented formulas for the analysis of variance allow to infer the degree of confidence relative to the obtained results. The considerations have been supported by the numerical example

Citation:

Adamczyk T. 2017, vol. 14. THE MARKET-BASED REGIONAL INDICATOR IN THE COST APPROACH TO VALUATION. Infrastruktura i Ekologia Terenów Wiejskich. Nr 2017, vol. 14/ I (2)