Assessment of Tangible Value of Historical/Heritage Property Valuation
This stems from the fact that heritage property contributes towards the economic development of a country. As such, an effective method of valuation should be in practice. There is no standard method being practiced for heritage property. t the conventional method of comparison is the most preferable method due to market conditions. While, the factors of heritage have not been given a primary consideration in the current practice. The valuation of heritage property requires special consideration in ensuring that the estimated value reflects the actual value of heritage property. The importance of heritage property is that it is able to increase the value of the surrounding property, create new employment, tourists attraction, has an economic lever and others. However, to make this a reality there are four activities that heritage property should undergo in its way to contributing towards economic development of a country. Valuation is an important stage in the preservation and maintenance of heritage property. The valuation of heritage property differs from other kinds of properties because heritage property is not actively traded in the market and most people tend to think that this type of property is worthless.
The method used in valuing heritage property can be categorised into two which are conventional method and advanced method. The conventional methods include sale comparison approach, cost approach and investment approach. The advanced method are stated preferences (SP) method, revealed preference (RP) method and hedonic pricing method. International accounting standards have proposed a method for measuring heritage property refer to historical cost, reproduction cost and fair value. The use of valuation techniques that include replacement cost, reproduction cost, net present value are difficult to carry out in valuing cultural heritage asset because they are assumed to exist in the ready market. Therefore, in many cases “conventional method” cannot serve as a reliable proxy in economic valuation for non-market goods. The following texts will discuss the concept of heritage property market and the current conventional method used in valuing heritage property.