There has been more work for property appraisers

Despite the two-year pandemic, the number of real estate appraisal orders has increased, based on the desire of people to buy an apartment or build a house, as well as to develop their business. Vilis Žuromskis, chairman of the board of the Association of Property Appraisers of Latvia, chairman of the board of SIA Euroeksperts, told this in an interview with the special issue of Dienas Biznesa. According to him, this year’s valuation volumes could be similar to the volumes of previous years, as there is hope that the process of expropriation of properties necessary for the construction of the Rail Baltica railway will start. Excerpt from the interview Has the pandemic affected the valuation of real estate and also their valuation? The number of property valuation orders has increased. In general, the volume of real estate valuation orders in 2021 has grown to 20% on average. For example, for the company SIA Euroeksperts, the year 2020 was much better than the pre-pandemic year 2019, and the year 2021 is even better than the year 2020. Of course, Euroexpert deals with all kinds of valuations, starting with the valuation of business (entrepreneurship), real estate and movable property. A similar increase in valuation volume was observed for other valuers as well, and this is evidenced by the increase in demand for valuation services, especially for real estate valuation. First of all, the reason for the increase in the demand for real estate appraisal was the purchase of real estate that requires a loan, or the property was planned as a pledge for some other transaction. And in such a situation, the most important thing to remember is that real estate price and market value are two different concepts, the size of which can be very different. Secondly, real estate valuation was necessary for state enterprises and municipalities for expropriation of properties, determination of market rent or determination of the value of building rights. Thirdly, real estate valuation is necessary when valuing a business, because real estate – buildings, land, engineering structures – is a valuable asset of the company. Unfortunately, a large part of real estate valuation orders is made up of valuations for legal proceedings, insolvency processes. So one of the main customers of ratings are banks?

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