Browsing by Subject "kauppa-arvomenetelmä"

The value of wood production of forest property is based on the net present value of future cash flows. In practice, the value of the forest property can be determined by future cash flows, replacement cost or market price. When the valuation is based on the probable market value of the forest property on the free market, the valuation should be based on market information according to the International Valuation Standards. In Finland, the main forest property valuation methods are summation approach, income approach and market approach. Market information can be considered in income and market approaches as required by the International Valuation Standards. The market approach is based on comparison, where different descriptive and explanatory predictors that affect the transaction price are being compared. Income approach is based on the discounted net present value of future cash flows from forest. The market approach will lead directly to the likely market value if there are enough representative transactions. The income approach leads to the likely market value if the discount rate is derived from market information. In this case, the income approach is called market-based income approach. The aim of this study is to determine how usable market approach is for valuation of forest properties. In this study different price models are created with large transaction price statistics, containing over 4 500 forest property transactions between years 2017–2020, which includes average forest inventory data transaction-wise. Price models explain the variation between price per hectare by region with average forest inventory data. The price models are compared to marked-based income approach with most recent transactions due to transactions price statistics used in this study (n=158). To calculate the marked-based income approach for different forest properties, open forest data were acquired from Finnish Forest Centre and internal rates of return were calculated transaction-wise. The market-based income approach was calculated with IPTIM Assets -software provided by Simosol. According to the results of this study, it was found that the market approach could explain the variation of price per hectare well, but the results of price models remained quite inaccurate by root mean square error. When determinants were added, model-specific explanation rates increased, and the accuracy of the models improved. The most comprehensive model included region, volume (m3/ha), proportion of seeding stands on forest land (ha), log percentage (%) and year as determinants for price per hectare. The most comprehensive model had an explanation rate of 88,1 %, RMSE of 686 €/ha and RMSE % of 19,5 %. For the calculation of market-based income approach, internal rates of return were calculated. The average internal rate of return was 4,2 % and the median was 2,4 %. Treatment and the net present values of forest properties were optimized with average internal rate of return. The open forest data caused significant uncertainty in comparison of different approaches. The market approach appeared to be more accurate than the market-based income approach according to RMSE and RMSE %. The results of the comparison can only be considered as indicative due to relatively small sample size. According to this study, the market approach is usable for determining the market value of forest properties, but due to contingency on the forest property market, the results of models were relatively inaccurate. In the future combination of open forest data and transactions price statistics would improve the use of market approach and market-based income approach.