Valuation international challenges and opportunities in developing countries

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Valuation international challenges and opportunities in developing countries Powered By Docstoc
					 Valuation
     international challenges and
     opportunities in developing countries
      By Bruce Turner, AACI


           Introduction                                        In the past two decades, forces such as
     This article explores the importance of property      globalization, securitization of real estate, growth   “Valuation professionals
     valuation as a function of a modern land              in capital markets, climate change, changing
                                                                                                                      can contribute
     administration system (LAS), with particular          demographics and enabling technology continue
     focus on its relevance in helping address some        to drive the need for sophisticated national            significantly to fill the
     of the challenges faced by developing countries       concepts in integrated land management. At                decision-making
     that need infrastructure for fair and equitable       one end of the spectrum, in North America
                                                                                                                   information vacuum
     taxation, better land use control, efficient          and Europe, elements of land administration
     property and credit markets and access to             systems (including property valuation) are being            in developing
     international capital markets. Such infrastructure,   integrated into seamless business lines, where             countries, and
     including property valuation, is essential in         clients have focused access to a suite of property-
                                                           related services that inform their decisions in         consequently benefit
     formalized property markets to encourage
     domestic as well as foreign direct investment in      changing global property markets. Real estate           their own professional
     land, which is necessary to economic growth and       service providers are shifting their business              development.”
     wealth creation.                                      models through strategic thinking and business


40   Canadian Property Valuation Volume 54 | book 2 | 2010 Évaluation Immobilière au Canada                               click here to return to table 0f contents
planning, force field analysis, re-engineered                the demand by multi-nationals and developed                according to a recent German study, the
business processes for cross-functional                      countries for large land tracts in developing and          magnitude and relevance of FDI in land is
operations and improved service delivery,                    least-developed countries in Africa, Latin America         growing rapidly. And while FDI in land in
accompanied by development of international                  and South East Asia. Demand that has recently              developing countries brings many benefits to
professional standards.                                      escalated due to factors such as climate change,           developing countries, the commercial pressures
    At the other end, developing countries in                climate obligations, political support for agro-           on land are worldwide and not always positive –
South-East Asia and Africa are receiving advice              fuels, and trade liberalization – factors which            particularly where policy- and decision-makers do
through internationally funded projects about                were exacerbated by 2007-08 food crises and the            not have the benefit of information from efficient
how to establish the basic operations of a land              financial crisis of 2008. Although information is          LAS, which exist in formalized property markets.1
administration system and to introduce the                   scanty on individual transactions, their scope is              valuation professionals can contribute
fundamentals for functional property markets.                evident in the single deals which have been as             significantly to fill the decision-making
Of the 227 world nations, approximately 40 can               large as 1.3 million hectares.i Such land concession       information vacuum in developing countries,
claim to have formal comprehensive property                  decisions, made in the absence of functional land          and consequently benefit their own professional
markets (Williamson and Wallace, 2007).                      administration systems (providing for secure               development.
    Emerging property markets – including                    land tenure, land use control and land valuation
examples like Thailand and India – represent                 information) can increase conflict and make long-               Valuation:
investor-driven demand for valuation services.               term impact evaluation difficult.                          a pillar in land administration
A less well represented need for valuation                       Foreign direct investment (FDI) in landii              
				
DOCUMENT INFO
Description: This article explores the importance of property valuation as a function of a modern land administration system, with particular focus on its relevance in helping address some of the challenges faced by developing countries that need infrastructure for fair and equitable taxation, better land use control, efficient property and credit markets and access to international capital markets. Developing countries in South-East Asia and Africa are receiving advice through internationally funded projects about how to establish the basic operations of a land administration system and to introduce the fundamentals for functional property markets. A land administration framework helps provide valuation experts with context for how their services relate to other professionals in aiding policy- and decision-makers to achieve multi-dimensional goals in sustainable development. As appraisers gain a better understanding of global issues, they are introduced to collaborative opportunities that allow meaningful contribution to poverty reduction, economic growth and wealth creation through more efficient and effective property markets.
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