THE VALUATION AND MANAGEMENT OF PROPERTY IN A TRANSITION ECONOMY: THE CASE OF BELARUS

Abstract

The Belarusian real estate market is considered to date back to the years 1991/1992, when ownership reform enacted the private ownership of flats. Real estate services, including buying and selling, valuations and management, were started in Belarus in 1992. Over the last ten years, the amount of valuations has increased rapidly due to the fast development of the real estate market. Today the major clients for valuations are banks, owners and investors; and the most commonly assessed value is the market value. The paper analyses the opportunities and problems of using different valuation methods in transition economy. The widely used methods for estimating the market value are the sales comparison approach and the income approach. The comparison approach is used more to estimate the market value of dwellings and land. The use of this method is limited in the case of income-producing property, because the number of transactions is very small. Analysis of valuation reports shows that the yield rate and capitalisation rate have been misused to estimate the market value. The paper concentrates on how to find the capitalisation rate using different methods and the investigation of the effect of the results on the assessment of market value. The paper also analyses the opportunities and problems of property management in transition economy from the grows of investment value point of view.