DATA-TYPE ADJUSTMENT FOR RESIDENTIAL PROPERTY VALUATION IN JAKARTA: AN EXPLORATORY STUDY
DOI:
https://doi.org/10.21837/pm.v21i27.1281Keywords:
asking price, valuation, adjustment, residential propertyAbstract
Valuers model market behaviour to estimate market value in property valuation. This requires a sufficient number of arm’s length transaction price as comparables. In the Indonesian context, this proves to be difficult given the lack of market transparency. Thus, valuers often rely on asking price in their analysis. This may affect the accuracy of their value estimate as asking price does not represent property market. Asking price needs to be adjusted to arm’s-length transaction better. This research seeks to study the magnitude of such adjustment. For this purpose, asking price and their corresponding transaction price of 331 properties in Jakarta were analysed. A questionnaire was also administered to capture the adjustment commonly used by valuation practitioners. The data shows that on average, asking price is 6% higher than its transaction price with no significant differences across areas in Jakarta. This is far below the 14% average adjustment used by valuers in their practice.
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