Explain how the value of property is affected by changes in the property market - Essay Example

Even economic harmonisation in the form of the inception of the European Union has failed to change the uniquely individual property market and value practices in the EU member states.This is true even today despite the same observations carried out by Downie (1995) and McIntosh and Ellis 1994).These factors which affect property values differ from jurisdiction to jurisdiction based on the different business and economic cultures within the European Union member states which will result in the variability of valuation approaches from country to country (Downie et al., 1996). Moreover these factors will also be affected by financial, fiscal and economic environments of a country with the result of widely divergent real estate structures.

These factors as understood by Waroloa and Bernask (1996) can have direct and indirect influences upon the structure, operation and valuation of the real estate concerns in an economy.With reference to the particular set up of Europe they observed that these factors include Factors like those set out in the Table below. The modern international property market as lacking a central trading centre has often been largely criticised as a reason that the value of property prices will always be victim to the particular circumstances of a country as the market is not based on a cluster of geographical and sectoral submarkets.

The problem is no two properties (with the exception of homogenous flats a building arguably) are identical and there is a significant information gap for those involved in such transactions.Here we can contrast the Property market with the Equity and Bonds market in the sense that this information gap for the realtor and the buyer necessitates the use of market valautions.This same estimate of price is likely to stay in a state of flux due to the divergent valuation methods and different political weather amongst many other factors