Simulation modelling as a method of risk analysis in real estate valuation

Abstract

The advent of the fourth industrial revolution was marked by the fact that changes became the main characteristics of the new time. It means a high level of uncertainty and instability in the business environment. The real estate market, being a part of the investment market, is changing. The current development of Russia’s investment potential leads to an increasing need for professional management of the profitability of such investments. Thus, the main goal of this research is to present non-traditional methods of risk assessment, which should be used in determining the market value of the real estate object at the present time. Simulation modelling is a method of research in which the system under study is replaced by a model that describes the real system with sufficient, with which experiments are conducted in order to obtain information about this system. An example of the application of simulation modelling in the analysis for the purpose of choosing the best and most effective use of a land plot as conditionally free is given. Financing of investment projects is a dynamic process that requires a risk assessment.

Modelling the drivers of data science techniques for real estate professionals in the fourth industrial revolution era

“…Guan et al (2014) revealed that data mining and analysis approaches are driven by artificial intelligence that originated from data scientists has been tested as a preferable solution for real estate professionals for analysing big data. McCluskey et al (2013) and Gromova and Pupentsova (2020) opined that different modern data analysis and mining techniques are driven by artificial intelligence utilised by real estate professionals. The most popular artificial neural network (ANN) originated from the data scientist domain established to replicate human cognitive functioning.…”

“…Lee and Park (2020) discovered that effective data management is crucial for adopting modern data analysis techniques for real estate professionals. Poursaeed et al (2018) and Gromova and Pupentsova (2020) discovered that the data management technique adopted by a real estate professional is vital in the performance of modern data analysis like ANN, CNN and others. Furthermore, Kasprzak (2021) affirmed that effective data management is essential for the transformation of real estate practice in the fourth industrial revolution era.…”

“…The 4IR has facilitated the creation of supercomputers that can collect and store a large amount of virtual data in an organised format (Akwang and Chimah, 2021). Unfortunately, deciding on a large amount of data remains challenging for an estate surveyor and valuer (Gromova and Pupentsova, 2020). Likewise, Kim (2019) asserted that estate surveyors find it difficult to create a helpful pattern from an extensive data set based on their curriculum.…”

“…Antoniades (2021) effective predictive models to cater to disasters or economic recessions. It can be inferred that predictive models functions as a vaccine for the performance of real estate investment Hence, to enhance the performance of real estate investment, studies such as (Gromova and Pupentsova, 2020, Baldominos et al, 2018, Guan et al, 2014 have proposed using data science techniques like machine learning, convolutional neural network, and others. Other studies, see (Valier, 2020, McCluskey et al, 2013, Peterson and Flanagan, 2009, compared the techniques originating from the domain of data science in the 4IR era and traditional multiple regression analysis.…”

“…Hence, to enhance the performance of real estate investment, studies such as those of Gromova and Pupentsova (2020); Baldominos et al (2018); and Guan et al (2014) have proposed using data science techniques like machine learning, convolutional neural network and others. Other studies (see Valier, 2020;McCluskey et al, 2013;Peterson and Flanagan, 2009), compared the techniques originating from the domain of data science in the 4IR era and traditional multiple regression analysis.…”