Modeling the Value of Double Storey Terrace Houses Using Summation Method

Abstract

The values of the real estate assets are increasing through the years based on the Malaysian price index. To determine the value of a house one can apply for valuation done by the government body which can be tedious and time consuming or one can hire private appraisers that can be costly and the methods used are different from one another. The purpose of this study is to propose a new valuation model for double-storey terrace houses that can be used for all. The double-storey terrace houses in the state of Johor were used as a case study. In modeling the formula, the land and the physical structure of the real estate asset were determined separately. Land value was obtained by using the TOPSIS method while the physical structure value was by using the cost approach as a basis. Then, both were combined by using the summation method to become a hybrid model. The assumptions of the model were identified. The result shows the valuations are strongly positive correlated with the market prices. In conclusion, this model is suitable for appraising a double-storey terrace house.