Those involved in the pricing of European real estate currently face a number of challenges. These include variations in the level and quality of available market evidence, issues relating to the definitional and methodological consistency of valuations produced in different markets, and the challenge of coordinating and standardising valuations of cross-border portfolios appropriately. Perhaps most important, though, is the fundamental lack of comparable transactions in the current market, and the cross-border inconsistencies in pricing that result from this. The expansion in the size of the European real estate market in 2006–2007, in particular, raised the profile and importance of many of these issues — and they haven’t gone away just because the market has declined since.

REDUCED VOLUMES

Investment activity in the European real estate market has declined sharply since the end of 2007. The most recent data for the first