A vision of real estate appraisal in Egypt, problems and solutions
Hisham Mohammed Al-Mahdi
Real estate appraisal expert (29) appraiser (436) damage assessment expert (1052)
The future of the valuation profession lies in the local valuation experts and their advice to clients from lenders, companies, developers, tax authorities and other government agencies so that they can take appropriate decisions regarding risks and earn profits. A securitization company to evaluate commercial real estate investments, where these investments in emerging markets provide much higher returns than local investments, or it may be advice to a government agency to preserve the right of the state, such as evaluating the appropriate compensation for the state (as a result of converting land from an agricultural investment to a luxury real estate investment) Lands on the Cairo-Alexandria road Desert and Ismailia Egypt Road) and as was said in the old saying “If you are not part of the solution, you are part of the problem.” This article aims to stimulate discussion between real estate appraisal experts and stakeholders and analyze the existing situation and trends in the field of global assessment and the actual performance of the Egyptian market To consider policy in the field of evaluation and improvement of legislation and harmonizes between national standards and legislation The Arab Republic of Egypt and bring it closer to international standards. Also, we need to create an integrated automated system for storing and transferring information and interaction to provide assessment services to market players that will help to solve problematic issues such as the reliability of the independent assessment.
The evaluation profession is criticized because evaluation thought is “just an opinion.” Evaluation is an opinion, but it depends on the facts of opinions that are applied within the evaluation process. Statistical analysis, advanced analyzes and geographic information systems allow evaluation experts and users of evaluation services to reach empirically derived conclusions in addition to developing more robust analyzes On seeing the facts in terms of value adjustments and final conclusions which will dramatically increase the credibility of individual evaluators, the profession as a whole, and most, if not all, professions combining empirically derived facts with opinions.
Real estate appraisal as a very young profession has been developed and put into place the mathematical, statistical and analytical tools used in real estate appraisal. Otherwise, as the appraisal profession is viewed from a further perspective, commercial practices have changed dramatically and to solve the problems of valuation and upgrading the profession, the real estate appraiser must be more stringent to the knowledge requirements and carry out a comprehensive reform such as caring for real estate appraisal for securitization purposes and focusing on market standards and risks related to ownership ... etc. And the cognitive requirements can be summarized in the following points: - (1) Using geographical information statistically to determine the value of the site. (ii) Market analysis which is a critical part of due diligence for land investment, understanding the global economic system, and developing an understanding of DCF valuation methodologies. (3) GIS is a recommended tool for use in market analysis for buying, selling and investing in land, and (4) use of modeling in land development to test the feasibility and risk assessment and AVM automated evaluation models.
To survive in the new century, the evaluation profession needs evaluation professionals who are arbiters of information and not collectors of information. The development of the evaluation profession has always been driven by individuals with vision and courage to see beyond the present and work collectively to provide a database and work on local evaluation standards that are compatible With international assessment standards and taking into account the Egyptian environment and the difficulties that exist in this environment
For example, but not limited to, and through practical life, we will expose to some examples in which the evaluation profession plays an essential role in solving problems
1- Evaluation of government agencies
Government agencies need real estate appraisal a lot to solve their problems. Recently, there was privatization, and as a result of legalizing corruption, many problems have arisen. Also, the government is expropriating property for the public benefit. One of the most important events that we experience is appraisal for the purposes of real estate taxes...etc. In brief, we show some of the problems that are exposed It has government agencies related to real estate appraisal, provided that I elaborate on it in subsequent articles, God willing.
1-1 Evaluation for real estate tax purposes
Real estate taxes exist almost all over the world The main role of taxes on local real estate is to provide a source of income to finance local services. Real estate taxes include a variety of taxes on land, buildings and other immovable property. The tax base varies from country to country. The basis on which the tax base is determined differs from one country to another. In some countries, the basis is the market value of lands with buildings. In other countries, only the market value of lands is used, and some countries use the annual rental value of lands and buildings, as is the case in Egypt. The main issue in estimating the tax is the information available on the rental or sale of real estate.
In Egypt, the basis for determining the tax base is the annual summary value of lands and buildings. The Real Estate Tax Authority is responsible for the valuation process. The inventory committee begins the process of issuing a notice to the owner or occupant of the property describing the property and the rental value. Therefore, the evaluation committees verify and conform to the data on In fact, the data is recorded in books prepared for this. The rental value reflects the value of the property according to the current use.
In Egypt, the valuation process is done manually based on data collected from the payer