PROPERTY VALUTATION AND PROFESSIONAL PRACTICE
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- Versione italiana
- Academic year
- 2018/2019
- Teacher
- LAURA GABRIELLI
- Credits
- 11
- Didactic period
- Primo Semestre
Training objectives
- The purpose of the course is to provide the student an economic framework within which to explain and understand demand and supply, prices and costs in real estate market. The student verifies that the projects will be conceived within the complex economic relationships of the property market and the construction sector. The course will introduce students to property valuation, and property investment to develop an analytical framework by which is possible to make sound real estate investment decisions. Students will learn the concepts, tools, and techniques for valuating plans and projects, based on the application of economic theory.
The course aims to provide knowledge and critical skills concerning Planning Law, even in the light of the most recent reforms, jurisprudence and doctrine. The course will focus particularly on the issues strictly linked to the profession. At the end of the course, it is expected students will be able to properly understand and work with legal texts, which are a relevant element of the professional activity.
Knowledge
¿ knowledge of the real estate and the construction market, understanding of the mechanisms of price and cost formation in the construction and real estate market;
¿ knowledge of the market analysis according to demand and supply to prepare the project that meets the needs of users and in comparison with the competitive framework;
¿ understanding of the main approaches used for property valuation (sales comparison approach, cost approach, and income approach);
¿ knowledge of data analysis and processing, and elements of descriptive statistic for data analysis;
¿ understanding of building and land valuation;
¿ understanding of principles of real estate investment and feasibility analysis during design, construction and management phases;
¿ understanding of the project and its inclusion within the complex economic relations that form the real estate and construction markets;
¿ knowledge of the fundamental elements of property taxation and the functioning of the Italian Real Estate Registry;
¿ knowledge of the main principles of Planning Law;
¿ knowledge of the different land use plans;
¿ knowledge of the building permits;
¿ knowledge of the main relevant aspects of the professional activity: competence and professional responsibility;
¿ basic knowledge of professional practice.
Skills.
¿ ability to recognize the main characteristics of the real estate market and their influences on the market value of buildings and lands
¿ ability to identify and study the primary economic interests and drivers of the transformation operation
¿ ability prepare a feasibility plan of a small to medium scale real estate operation;
¿ understand the formation of prices and costs and employ appropriate procedures for their estimation;
¿ ability to apply different methods for determining market values, cost and income;
¿ analysing the project within economic relations in the real estate and construction market, perform feasibility analyses of potential real estate projects that measure both the economic and financial benefits of the project;
¿ assessing the transformations of the built environment; with particular reference to the techniques used to finance real estate projects.
¿ ability to recognize in real situations the principal legislative texts, which regulate urban and suburban transformations;
¿ ability to identify economic implications that texts have in the case studies. Prerequisites
- The knowledge of the Construction Costs and the the Bill of Quantities, both developed in the Economics and Valuation Module (Design and Construction Studio 1), and knowledge of the relationship between costs and times developed in Valuation and Construction Accounting Module (Design and Construction Studio 2).
Course programme
- 1. Economics
1.1. Introduction to Economics: prices, demand, supply. 1.2. Consumer behaviour; Firm behaviour. 1.3. Market equilibrium in perfect competition and in imperfect competition markets. 1.4. The real estate market: demand, supply, players, database 1.5. The construction market: demand, supply, players, database.
2. Real estate valuation
2.1. The principles of the valuation. The direct and indirect approaches. 2.2. International valuation standards. 2.3. Market value: mono-parametric and multi-parametric approaches. 2.4. The frequency distribution. 2.5. The valuation with “merit points”. 2.6. The Market Comparison Approach (MCA). 2.7. The hedonic pricing model with simple and multiple linear regression 2.8. Mathematical finance. 2.9. Theory of interest. Simple interest, discount interest, compound interest. 2.10. Annuities 2.11. Repayment schedule. 2.12. Income approach: direct and yield capitalization 2.13. Discounted cash flow analysis for market value estimation. 2.14. The cost: approach. 2.15. Bill of Quantities. 2.16. Other approached for cost calculation. 2.17. The residual value. 2.18. Other values.
3. Projects valuation
3.1. Investment decision techniques. 3.2. Rates used in the real estate market. 3.3. Discounted cash flow analysis. 3.4. The feasibility of real estate investments and decision-making techniques. 3.5. The net present value, the internal rate of return, the payback time 3.6. Risk analysis. 3.7. The life cycle cost 3.8. Multicriteria Analysis. 3.9. Negotiation procedures with multiple criteria, AHP. 3.10. Valuation of projects in respect to sustainability and energy efficiency.
4. Planning Law
4.1. Sources and principles of Planning Law. 4.2. Legislative and administrative tasks of State, Regions and local authorities in Planning Law. 4.3. Content, processes and effectiveness of land use plans. 4.5. Planning deals. 4.6. Forced expropriation. 4.7. Building permits.4.8. Public works. 4.9. Professional responsibility.
5. Professional practice
5.1. The land and building Registry. 5.2. Elements of real estate taxation. Didactic methods
- The course is taught through lectures, class exercises and projects works. The class activities are called “ex-tempore”, an in-class activity, developed by student divided into groups on a given topic. The project work is developed throughout the course during seminars when students present their results and progress. The project work consists of determining the market value of property. The project work must be carried out in groups. During the lessons, the ability to understand the topics illustrated during the course will be evaluated during the course.
Learning assessment procedures
- The final exam aims to test the level of understanding of the key concepts and contents of the course. Students are graded in two ways: assignments and exams.
Assignments
- The first assignments are the class exercises explained in the previous sections. Each student must know the content of the project work of his/her group and can achieve a different assessment of his/her knowledge and presentation skills. The valuation will be based on: the completeness of the project work; the correctness and consistency of the process used to perform the market analysis; the ability to justify decisions about the costs / prices / income and the approached used.
Exams
- The second part consists of an individual valuation on both the theoretical and the practical part (exercises) carried out during the course. This part is intended to evaluate the understanding and critical skills of the topics covered during the course.
The final grade is given by the evaluation of the classroom tests during the course, the project works, and the individual examinations. Reference texts
- Gabrielli L., Lami I.M., Lombardi P. (2011), Il valore di mercato: note di lavoro per la stima di un immobile urbano, Celid, Torino.
Urbani P., Civitarese Matteucci S. (2017), Diritto urbanistico. Organizzazione e rapporti, Giappichelli, Torino, limitatamente ai capitoli nn. 2; 3; 4; 5; 6; 7; 8; 9; 10; 11; 13; 14.
Realfonzo A. (1994), Teoria e metodo dell’estimo urbano, Nis, Roma.
