The real estate appraisal methods and appraising real estate investment companies

The high levels of inflation rates and the crisis exercised in passedyears have caused the rates of interest to have been remained highcontinuously, and eventually not purchasing of the funds with long termmaturity. A great portion of construction investments in developed countries isrealised by an institutional capital, and financed by the capital market tools. InTurkey, procurement of long term funds is, by all means, to be ensured for thereal estate sector in order to enable it to be developed within an institutionalstructure. The system would be self-fed, and then would have been reachedto a long term funds if issue of securities depended on housing loans madeutilized by banks would be possible through arrangements to be made in theLaw for Housing Finance.The main reason of expecting of a rapid development in the realestate market is the belief that Turkish economy will indicate a stable andsustainable growth performance in the future. The lower inflation and positivemacro-economic developments in 2005 become the evidences on the matterthat a better ambiance might be created in the future. Therefore, everyoneincluding financial sector ahead are to be ready such an economical medium.As of it?s the point it has reached today, the RIC (Real EstateInvestment Companies) sector has been able to realize neither of itsobjectives. The main reason of it is that no a Management Company for RealEstate Portfolio has ever been able to be established up to now in Turkey, yet.The existing RIC companies have the appearance of companies where thereal estates acquired by banks and holdings are appraised. Therefore,inclusion of the companies which will enable to realize exactly the objectivesof existing RIC companies, to manage professionally the real estate portfolio,and to procure long term loans for development of the sector should beensured.Through coming into force on 01.05.2006 of the Announcement onInternational Valuation Standards in Capital Market, those who makeappraisal under the regulations of real estate market have to followinternational valuation standards set forth in the said Announcement.However, highly qualified personnel have to be employed in the sector inorder to implement the Announcement strictly including behavioural rules.Since the investments which may be realized by the RICs by theirshareholders? equity are very limited, they were not developed during the lastdecade. As a result of the works implemented as oriented to the use of RICsexcessively important arrangements have been made in favour of foreigninvestors through such Announcement prepared by the Capital Market Boardof Turkey. It is expected that the long term loans of billions of USD would beentered in the real estate sector by mediation of these RICs through theseamendments in question made in favour of foreign investors.Real estate is one of reliable and important investment means whereindividuals and institutions may appraise their savings. Interest in appraisal ofreal estate and the RIC sector have dramatically been increased in line withrapid development of real estate sector and its legal infrastructure in recentyears. In our further period, large scale of responsibility is assumed by the realestate appraisal companies and the appraisers in order to exhibit thatappraisal of real estate is also made professionally in Turkey same as indeveloped countries. Real estate value, at the light of information beingcompleted in valuaton process, finally depends on the appraiser?s skill,experience and judgment.