WORKSHOP ON AUTOMATED VALUATION MODELS OF REAL ESTATE FOR CADASTRAL PURPOSES Santiago de Compostela

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WORKSHOP ON AUTOMATED VALUATION MODELS OF REAL
ESTATE FOR CADASTRAL PURPOSESSantiago de
Compostela (Spain) October 19-20,
2006
General Directorate for Cadastre of Spain -
Permanent Committee on Cadastre in European Union
- Geographics

• Automated Valuation Model by using Digital
  Purchase Price Collections in Lower
  Saxony/Germany
• Dipl.-Ing. Dieter Kertscher
• Chair of Advisory Committee forValuation in
  Braunschweig / Lower Saxony/Germany
• Chair of Administrative Agency Geoinformation,
  Development and Management of Real Estate
• Braunschweig
• Speaker from AdV Official Surveying in Germany

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Structure

• 1. Law / Instructions in German Valuation
• 2. Valuation Committees and private Valuers
• 3. Digital Purchase Prices Collections and the
  Analysis
• 4. Standard Ground Values derivated annual
• 5. Reports of Real Estate Markets derivated
  annual
• 6. Specific Calculation of build on Properties
  Methods
• - with 3 German Methods or
• - with Conversion-factors from Reports of
  Property
• - with Quick-Valuations from Valuation
  Committees
• 7. Looking in Future of Valuation in Germany

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• Legality - the base by law and following
  instructions
• 194 Federal Building Code (BauGB)
  Definitions
• Verkehrswert
• (Market Value)
• WertV
• WertR

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The Law base of the official Valuation
in Germany Essential task Provide
Transparancy for all markets of Real Estate by
Purchase Price Collec-tions
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Valuation of Real Estate in Germany
Indepen-dent Valuer
Valuation Commitees
The key At this side Data Protection
Purchase Price Collections
Basical Law in whole Germany
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The official Valuation of Real Estate in Germany
the base and all products
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Structure

• 1. Law / Instructions in German Valuation
• 2. Valuation Committees and private Valuers
• 3. Digital Purchase Prices Collections and the
  Analysis
• 4. Standard Ground Values derivated annual
• 5. Reports of Real Estate Markets derivated
  annual
• 6. Specific Calculation of build on Properties
  Methods
• - with 3 German Methods or
• - with Conversion-factors from Reports of
  Property
• - with Quick-Valuations from Valuation
  Committees
• 7. Looking in Future of Valuation in Germany

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Influential characteristics on market value
Real character- istics
location
legal character- istics
Economic cirum- stances
Market value
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Market Report Report of the local market with
all important informations
Agricultural land
Building plots
Condomini-ums
Houses - all types
Contracts of sale per quality of real estate
Statistics
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Collection of contracts of Sale for a build on
Real Estate
Supplimentation remaining influences like living
space, sanitary facilities, .......
Evaluation of contracts of sale
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Agriculutural and forest plots of land
Build plots of land
Unbuild plots of land
Owner- occupied flat
Other plots of land
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Die First steps in 1961 in Lower Saxony with the
automatically managed Perchase Price Collection
Size
Date of selling
Location
Purchase price
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Number of apartments
More-family-house
Place for a picture
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Automatisierte KaufpreisSammlung Niedersachsen
(AKS)
AKS is running
and running
and running
The automate Purchase Price Collection in
Lower Saxony - a very sucessfull story -
starting in 1961 - and is runing well today
like the VW, constructed in Lower Saxony too
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The first steps
1960
2000/ Today digital
1980/Today digital
1960
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Geoinformationssystem ArcView
Presentation of all prices of property of real
estate in AKS
Digital site plan product of AKS
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• AKS constructed and used only in Lower Saxony !!
• Is only made to use for her own
• Using by Valuation Committees only
• Installation in 52 Offices of Val. Committees
• Constructed with strong individualisme
• Using academic knowledge from TU Hannover
• In particular from Professor Werner Ziegenbein
• Realized in 1994 for all Valuation Committees
• Databanksystem INFORMIX
• Language SQL (structured query language)
• Temporary use by maximally 10 Federal states
• In 2007 Installation of a new LINUX-AKS-Version

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Structure

• 1. Law / Instructions in German Valuation
• 2. Valuation Committees and private Valuers
• 3. Digital Purchase Prices Collections and the
  Analysis
• 4. Standard Ground Values derivated annual
• 5. Reports of Real Estate Markets derivated
  annual
• 6. Specific Calculation of build on Properties
  Methods
• - with 3 German Methods or
• - with Conversion-factors from Reports of
  Property
• - with Quick-Valuations from Valuation
  Committees
• 7. Looking in Future of Valuation in Germany

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Official Standard Ground Values
Presentation in maps and today in some models
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Standard ground values in whole Germany - shown
in 3D
Maximum Stuttgart
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Standard ground values in Munich for today
Floor- Space- density
47 000 Euro/square meter Marienplatz
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Shoulder to capitale Bremen
Standard ground values of building-sites in the
region of Hannover (1985 in DM) presented in 3-D
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Wolfenbüttel
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Pedestrian precinct
3D-model of values of real estate in City of
Göttingen
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Standard Ground Value - Maps
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Standard Ground value - Map of Braunschweig
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Standard ground values of Braunschweig Deadline
1.1.2006 _________________________________________
______________ The annual map of recommended
approximate values of built and unbuilt plots -
only for property - Here in the central
commercial district Style using fraction
stroke At the top Euro/m² Below
usability and quality Definitions and
abbreviations in urban development MK
Plots in the centre of cities commercial
using MI Mixture of using commercial and
business establishment W Residential
area III IV Number of potential
floors 1.6 Number of floor-base E
Information to urban renewal (E final result)
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Standard ground values via Internet Monitoring
15 minutes 5 Euro
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The Annual Standard Ground Value Map -
Internet-Presentation
Some of the 16 Countries in Germany are ready
for online mode the next will follow soon.
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Using Standard ground values via Internet from
Banks
Communities
Companies
Administrative bodies, as well tax-office
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Adresse eingeben
Bodenrichtwerte im Internet
Einzelauskunft anklicken
Präsentation Starten
www.gutachterausschuesse-ni.de
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Übersicht über die Gemeinden für die
Bodenrichtwertsitzung
Präsentation Starten
Stichtag 01.01.2003
Bad Gandersheim
Katlenburg-Lindau Bodenfelde

Kreiensen Dassel
Moringen Einbeck

Nörten-Hardenberg Hardegsen

Northeim Kalefeld
Uslar
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Structure

• 1. Law / Instructions in German Valuation
• 2. Valuation Committees and private Valuers
• 3. Digital Purchase Prices Collections and the
  Analysis
• 4. Standard Ground Values derivated annual
• 5. Reports of Real Estate Markets derivated
  annual
• 6. Specific Calculation of build on Properties
  Methods
• - with 3 German Methods or
• - with Conversion-factors from Reports of
  Property
• - with Quick-Valuations from Valuation
  Committees
• 7. Looking in Future of Valuation in Germany

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Report of Real Estate Market in
Munich 2003 Written by Valuation Committee of
Munich
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Market Report Report of the local market with
all important informations, annual to 01.01.
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Grünland
Ackerland
Mehrfamilienhäuser
Gewerbegrundstücke
Einfamilienhäuser
Eigentumswohnungen
Unbebaute Grundstücke
Büroflächen
Altbauwohnungen
Ladenflächen
Market Report of Real Estate, drawn up by
Regional Valuation Committees with all
informations, you need for Transparency
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Price development of Real Estate individual for
one-family-houses in Berlin
Reunion in Germany
Fall of the Wall in Berlin
Visit of J.F. Kennedy in Berlin
Economic crisis
Berliner Contracts
Öil-Crisis
Economic crisis
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Average Values for One- Family- Houses in
Lower- Saxony 2004/2005
Extract from Market of Real Estate in Lower
Saxony 2005
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Market Report Report of the local market with
all important informations, annual
Blue Plots Yellow Row-house RedDetached
house Green Freehould flat
Price development in a special region The
Result Differences from type to type - You
must analyse all types
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Conversion - coefficients for different
living-spaces
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Structure

• 1. Law / Instructions in German Valuation
• 2. Valuation Committees and private Valuers
• 3. Digital Purchase Prices Collections and the
  Analysis
• 4. Standard Ground Values derivated annual
• 5. Reports of Real Estate Markets derivated
  annual
• 6. Specific Calculation of build on Properties
  Methods
• - with 3 German Methods or
• - with Conversion-factors from Reports of
  Property
• - with Quick-Valuations from Valuation
  Committees
• 7. Looking in Future of Valuation in Germany

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Valuation of build on properties
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Draw up Expert Opinions
Valuation of build on Properties in Germany
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• German Valuers knows 3 Methods
• to find out the Market value
• of a build on property
• Comparable method of valuation
  (Vergleichswertverfahren)
• Income approach to valuation (Ertragswertverfahre
  n)
• Depreciated replacement coast approach or Asset
  value method (Sachwertverfahren)

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The very best Strategy Comparable Method
Location of all objects
Registration numbering
Digital Site plan with all comparable
objects - Yellow Picture existing - Red No
picture prepared
Comparable objects - digital pictures,
registrated in the Perchase Price Collection
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Strategie der Vergleichswertberechnug
Strategy of Comparable Method
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Original-Purchase price /m² living space
Looking for e.g. 15 best comparable objects in
the whole region with characteristics near the
valuation object (mostly 300 to 6oo contracts in
one year)
Transformation to level valuation object
Comparable-factor
X Living-space
Wanted Value of the Valuation object
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Example Using comparable prices from
Purchase Prices Collection Comparison valuation i
n a town, objects are written with street names
but house numbers dont be written here - the
result of German Data-Pro- tection
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Data Protection in Germany - a great problem by
using Price Collections !!
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Extract from an Expert-Opinion
15 comparable prices and their conversion
Result
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Carry out a spot check for an Expert
opinion The best 15 comparable objects with
there 9 characteristics are be found by AKS and
are written down
Look Data- protection is kept !! Only
Municipality is written
Living-size
Valuation object
Comparable objects 1 2
3 15
Mean Value !!
Result 887 X 168 Wanted Value of valuation
object !
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Output Condominiums - 13 comparable objects -
Ausgabe Eigentumswohnungen (Ergebnis) -
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Report of Real estate market Influential factors
and their quantity of influence
One-family houses in Region Landkreis Musterort,
written down in /m²-living-space Of an object
to a deadline of 01.01.2003

• 5 characteristics are influencial on market
  value of real estate
• Year of construction
• Living space
• Furnishing of the building and
• Dimensions and plot and
• Site, location

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Preis / Wohnfläche /m²
Value-level for an object with 130 m²
living-space, 830 m² site and of middle Furnishing
1500
1000
Example of use
Object Constructed 1975, Living-space 100 m²,
Furnishing normal, Dimension of plot 830 m²,
Value of plot 60/m² without development
Correlation between other living-spaces
Look right into grafics ca. 1850,- /m² Factor
1,16 100 m² living space Comparable Value
round 225.000,- Euro
Differences in furnishing and workflow will guide
to values of more and less 20 .
100.00 130.00
160.00 190.00
Wohnfläche m²
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Market Report once a year Report of the local
market with all important informations
Application program
1140 x Living Area Market value
1140
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Quick-Valuations what is that ?
A quick Solution only for Standard-objects, like
One-family-houses, Condominiums, Row-houses,
Splitting into Age-periods und Living-size of the
House and Location and Size of the plot
Example Age Living-size
Location (input with
Standard Ground Value)
Size
The 4 most influencing factors the rest of
in- fluence must be estimated with professional
knowledge (e.g. furnishing, Garages,..)
add ons
Comparable Value
- reductions
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Quick-Valuations of Standard Objects with the
Results of Analyse by Multiple Regression
Schnell Bewertungen
Göttingen
Hannover
Nienburg
Rotenburg
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Activities of advisory committees today and in
future

• Make availble dates via Internet

Internet
Customer

• Standard ground values
• Report of real estate markets

Purchase price collection
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BORIS.NRW
Attributes of standard ground value
Mainfunctions
Selected adress
Extract from map with Standard ground value
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IRIS.NRW
Informations about Values of Standard-houses via
Internet
Pilot-project in NRW

• Target Average Values of site for
• One- and two-family-houses
• Condominiums
• More-family-houses
• Row houses

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Informations about prices of condominiums from
Purchase Price Collection
Allg. Preisauskunft Eingabe
Aim of research 10 transactions or more, with
year of con- struction and living size
Rechercheziel 10 Kauffälle oder mehrggf.
Aufspreizen von Baujahr und Wohnfläche Mindestens
5 Kauffälle, sonst keine Abgabe
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Common practice Information about Prices of
build on properties
Allg. Preisauskunft Ausgabe
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Target of evaluations in Germany One Portal
BORIS.Germany
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Lower Saxonies Solution to value your Real Estate
via Internet
Start Nov. 2006
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Richtwertzone / BRW Regressionsfunktion GAG
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Spannen aus Regressionsfunktion
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Immobilien Preis-Kalkulator
Price calculator for special objects of real
estate Pilot- Project in Lower Saxony today

• Druckausgabe (Bsp.)
• Format PDF
• ohne Hausnummer
• ohne Markierungspfeil

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Portal of Advisory Committees in Lower Saxony -
Conception
GAG - Portal Niedersachsen

• Online Service
• Standard ground values
• since 2000/2001
• Reports of real estate - -Access
  individual since 2003
• - Information in parts since 2004
• - Subscription since 2006
• Compulsory auction
• since 2005

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Structure

• 1. Law / Instructions in German Valuation
• 2. Valuation Committees and private Valuers
• 3. Digital Purchase Prices Collections and the
  Analysis
• 4. Standard Ground Values derivated annual
• 5. Reports of Real Estate Markets derivated
  annual
• 6. Specific Calculation of build on Properties
  Methods
• - with 3 German Methods or
• - with Conversion-factors from Reports of
  Property
• - with Quick-Valuations from Valuation
  Committees
• 7. Looking in Future of Valuation in Germany

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Informations of Valuation Committees via Internet
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Strength of German valuation practice

• Duty to send (legalizied by law) contracts of
  sale to advisory committee
• Authorized valuation committees
• Official authority

• Overall

Report system
Price collection
Transparency of real estate markets
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• Summary - Synopsis
• Basical law in Germany Bundesbau-Gesetz, the
  Federal Building Code base of all 16 federal
  states in Germany
• Public and private institutional Valuers works
  side by side
• Purchase price collections - The base of
  transparency
• Valuation Committees (Advisory Committees) and
  their products, Standard Ground value maps, the
  annual Real Esate Market Reports with Index-rows,
  Conversion-coefficients, Information out of
  price-collection, Expert opinions
• Lower Saxonys Automated Purchase Price
  Collection-AKS
• ApproachesValuation-GIS in Lower Saxony,
  Berlin, NRW
• Current developments of German Real Estate Market
  via Internet V-BORIS, ISIS in NRW,
  Immobilien-Preis-Kalkulator in Lower Saxony,
  Reference factors produced by multiple
  regression-analysis, Quick-Valuations by
  advisory committees

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• Results and Problems with Automated Valuation
  Models in Germany today
• Summary With our concept to analyse Collections
  of contracts of sale we are going a good und
  successfull way to make tranparency on Real
  Estate Markets in Germany. Automaded valuation
  models of real estate are very helpfull for
  cadastral purposes !!
• But lots of lessons had to made in future !!!!
• Costs to manage a Purchase Price Collection !!??
• Data- Protection in Germany is a big ankle in
  practice (We are Champions in the world in data
  protection! what a pitty !!!)
• There are differences in quality in practice from
  German country to country ( our federal solution
  with 16 countries in Germany is not the best,
  e.g. schools, Valuations, )
• You can see this handicap clearly in Internet
  today !!!

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Potential to even better tranparency on real
estate markets in Germany

• Public Private Partnership
• Relaxation of the fixions of data protection
• Installation of Advisory Committees for the
  whole land (Supreme Advisory Committee)
• Optimize handling purchase price collections, one
  nation-wide ??

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But Report of Real Estate of Munich found that
conditions for Valuations in Germany are
paradisiacal, heavenly !! Why? Today it is
not the same like Adam und Eve in paradise in
those days with the apple. Supply and demand ???
Yes. But there was no posibility to draw a
comparison !!! Today we have lots of comparisons
in such a Market Report like this in Munich !!
Therefor Paradisiacal con-
ditions for Valuers in Germany today !!!!