Open AccessABOUT THE LIMITATION OF USE OF THE COST APPROACH FOR PRICE FORMING IN HOUSING MARKET
Author(s) -
I. I. Ivasiv,
Mykola Danyliuk
Publication year - 2018
Publication title -
naukovij vìsnik ìvano-frankìvsʹkogo nacìonalʹnogo tehnìčnogo unìversitetu nafti ì gazu. serìâ "ekonomìka ta upravlìnnâ v naftovìj ì gazovìj promislovostì"/naukovij vìsnik ìvano-frankìvsʹkogo nacìonalʹnogo tehnìčnogo unìversitetu nafti ì gazu. serìâ ekonomìka ta upravlìnnâ v naftovìj ì gazovìj promislovostì
Language(s) - English
Resource type - Journals
eISSN - 2415-3311
pISSN - 2409-0948
DOI - 10.31471/2409-0948-2018-2(18)-61-69
Subject(s) - valuation (finance) , real estate , cost approach , market value , identification (biology) , value (mathematics) , business , market price , economics , industrial organization , microeconomics , environmental economics , real estate development , computer science , finance , botany , machine learning , biology
A number of technical and economic features affecting pricing in buildingproduction, determine the methods specifics for determining prices of construction products. Intoday's conditions of building market relations the most widespread is a cost approach to theprices formation in the residential real estate market, which, together with the significantadvantages, has a number of shortcomings, which indicate the limited use of it, namely: theunreliability of reflecting the projected income value; the problem of calculating the cost of oldbuildings reproduction; the complexity of determining the value of accumulated old buildingsdepreciation; a separate assessment of the land plot from the buildings; the discrepancy betweenthe cost of the acquisition of the estimated property object costs for the new construction ofexactly the same object.The article deals with the processes of price policy formation at the building industryenterprises with the purpose of improving their competitiveness. The peculiarities of costlymethods use of real estate valuation, their advantages and disadvantages are revealed. The mainfactors influencing formation of the pricing policy of building industry enterprises are analyzed.It is proved that a cost approach is appropriate to apply for new construction analysis, forthe identification of various options for land use, for assessment for tax purposes, insurance,consequences of natural disasters and, if necessary, assessment of special buildings andstructures.