INCORPORATING SUSTAINABLE BUILDING FEATURES INTO PROPERTY VALUATION: A REVIEW

Abstract

The importance of expanding the level of Sustainability in the real estate directly affected to impact of the built environment on our planet. Real estate valuation is a process of forecasting the future benefits of interest in the property and converting this into a current price. The impact of Sustainability on the market value of a building would require more advanced valuation
techniques to fully determine the impact of Sustainability on valuation elements and subsequent the overall value of the property. However, Sustainability is a complex issue for property practitioners – including real estate agents, property valuers, financiers and insurers – about which have thorough ideas in incorporating information related to sustainability features into their practices. There some methodologies identified that seek to identify the relationship of the impact of Sustainability on building's market value. However, none are entirely reliable and able to measure the impact of Sustainability on market value accurately. Some academic researchers have been done on sustainable building development focusing the benefit in term of social, environmental and economic. Over case studies, observational data and property market information expose the existence of the relationship between Sustainability and market value. After all, in valuation practice, the professions stand unaware of the research finding of a relationship between Sustainability and market value and therefore the keep restrained from incorporate this into prevailing practice. This paper reviews the literature on sustainable building features on property valuation.