The Components of Appraisal Accuracy

In the past decade or so, there has been growing attention paid to the question of appraisal, or valuation, accuracy. Studies that encompass this question have principally been driven by concerns over how appraisal in accuracy may adversely affect the validity of appraisal-based real estate indices and of the portfolio management policies that draw inferences from them. Such studies have been pursued in the US (e.g. Webb, 1994; Fisher, Miles and Webb, 1999; Clayton, Geltner and Hamilton, 2000), the UK (e.g. Matysiak and Wang, 1995; Blundell and Ward, 1997; Drivers Jonas/IPD, 1997) and Australia (Parker, 1998; Newell and Kishore, 1998). Given the nature of the concerns, these studies have generally focused on commercial appraisals, especially of institutional grade real estate, although accuracy is a wider issue that surrounds all forms of appraisals.