The Digital Transformation of the Valuation Sector in the World of Algorithms

Over the years, the concept of digitalisation has rapidly integrated into many sectors. This Research Paper will discuss the valuation sector’s digital transformation, predominantly investigating the automated valuation models (AVMs) and their integration in valuation.

Real estate is one of the oldest and the largest asset class in cities (Kok et al., 2017: 202). As explained by (Gilbertson and Preston,2005: 123), in mature economies, a large proportion of financial decision-making relates to property.

Therefore, if the assets are not correctly valued then an extensive range of stakeholders are exposed. The 1970s property crash prompted RICS to publish the Red Book, setting out standards of valuation and professional conduct expected of valuers (Gilbertson and Preston, 2005: 124).

However, the fluctuation and the relationship between value, worth and risk remain unchanged. The recent paradigm shift to the concept of digitalisation requires a discussion of economic development in relation to social development. This necessitates considering political (the role of governmental bodies concerning smart governance), social (individuals\dwellers in regards to raising the quality of life) and economic (such as real estate markets together with its stakeholders, including government, banks, building societies, insurance companies, and investment firms in regards to the coordination and collaboration) factors.