studying surveying and real estate in finland and in some other european countries national taipei...
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Studying Surveying and Real Estate in Finland and in some other European
countries
National Taipei University
Professor Kauko Viitanen
Department of Surveying, Inst. of RE Studies
Helsinki University of Technology (TKK)
11th May 2007
Some personal data of Kauko Viitanen (1955)
• Professor of Real Estate Economics and Valuation, Ph.D.• Dean of the Department of Surveying, Helsinki University of Technology (2000-)• Member of the Board of the Helsinki University of Technology (2003-)• Head of the Institute of Real Estate Studies, Department of Surveying, TKK (1998-)
• Chairman of the Finnish Association for Real Estate Valuation (1999-2007, Member of the Board 1994-)• Chairman of the Property Valuation Board of the Central Chamber of Commerce (2004-)• Chairman of the Commission 9, Valuation and Management of Real Estate, the International Federation of
Surveyors (FIG); (2006-2010)
• Legal Adviser in the Cadastral Mapping and Land Registration Pilot Project in Cambodia, FM-International ltd FINNMAP (2 months, 1997)
• Professor, Helsinki University of Technology, Department of Surveying (1998-) • Associate Professor of Land Management, TKK (1992-1998) • Department Manager, Huoneistomarkkinointi Oy, Department of Market Research and Information (1989-
1991) • Property Valuer, Huoneistomarkkinointi Oy, Department of Property Valuation (1989)• Researcher/special researcher, Technical Research Centre of Finland VTT, Laboratory of Urban Planning and
Building Design (1986-1988)• Legal Gadastral Surveyor, The National Land Survey of Finland (NLS) (1978-79, 1980-86)
Helsinki University of Technology (TKK) in a Nutshell
• www: http://www.tkk.fi/English/• Founded in 1849, received university status in 1908 • Twelve faculties, one Surveying• Nine separate institutes • 19 degree programmes, one Real Estate Economics• 250 professors• 15 000 under- and postgraduate students • 1000 Masters´ degrees awarded and 150 doctorates
Finland’s location in Europe
Finland
Area 338,000 sq.kmPopulation 5,3 millionHelsinki Area 1 million
Language Finnish
(Source: CIA)
Department of Surveying, TKK
Degree ProgrammeReal Estate Economics
Institute of Real Estate Studies
3 Professors
Institute of Law
1 Professor
Degree ProgrammeGeomatics
Institute of Photogrammetry
andRemote Sensing
1 Professor
Laboratory of Geoinformation and Positioning Technology 3 Professors
About 550 Undergraduate StudentsAbout 140 PhD Students
Annually about 40 master’s degrees (medium 6,5 years) and 3 doctor’s degrees (5 in 2006)
Land Surveyor at the end of 1700
• First Surveyor in 1633
•The education was based on a system of apprenticeship until middle of 1800 when it moved
to the technical schools as in the Central Europe
• University level education at HUT 1908
• Until 1972 the examination almost same for all surveyors
• Since 1972 the students have had many possibilities to take their own majors and minors,
i.e. to specialise
• In 1993 the Degree Programme (MSc) of Surveying was divided into two options: Property
Economics and Law; Surveying and Mapping Technology
• In 2000 the Degree Programme (MSc) of Surveying was divided into two Degree
Programmes
• In 2005 Degree Programmes were restructured into two-cycle programmes: BSc and MSc
Introduction• The aim of presentation is to give an
overview of how and why the real estate programme at TKK have been developed dramatically during past decades
• The presentation also gives ideas of how the surveyor education should be developed in order to survive in the changing environment
History of real estate education at TKK
1633
The first surveyor
1908
Helsinki University
of Technology
1971
Curriculum reform
1993
Two official study
options
2000
Two degree programmes
2005
Bologna process
Discussion, Conlusions
• The study object in real estate studies at TKK has changed and broadened a lot during the last decades
• Also the technical field has developed from field measurements and mapping to satellite analysis, GPS, navigation and GIS-modelling etc.
• It was clear that one surveying programme could not anymore handle all these areas
-> The unified surveying programme was divided into two independent degree programme
DEGREE PROGRAM OPTION MAJOR
GEOMATICS (MSc)
REAL ESTATE ECONOMICS (MSc)
Intake 40
Intake 50
Geoinformatics
Surveying and Mapping Technology
Land Management and Law
Real Estate Management
Positioning and Navigation
15.8.2001 (ST d:/myfiles/koulutusohjelma1.vers 2 3)
RE Economics and Valuation
RE Economics and Valuation
Imaging Tecnology
Remote Sensing
Cartograpy
Photogrammetry
Geodesy
Land Management
Economic and Real Estate Law
Real Estate Management
Environmental Law
Building Materials Technology
Economic and Real Estate Law
Information Science
Geoinformation Tecnology
Environmental Law
Construction Economics Intake 15 into Civil Engineering
Gained Benefits and Challenges
• Benefits of curriculum development– Number of applicants has increased– Real Estate education is known and respected– More funding to the research activities
• Problems– Small department amongs the big ones– Industry attracts too much students– Fulltime PhD students are hard to find– Research projects grow continuously, a small entity cannot
get on alone -> networking
Discussion, Conlusions
• The programmes are still run in the same department with some joint studies
• Geomatics teach students of Real Estate Economics to gather information of the environment and to handle and analyse it.
• This is important in order to survive in the more and more ICT-based world
Discussion, Conlusions• The division has strengthened the real estate education
dramatically • The education is now popular among students,
appreciated in the industry and stronger also in research• The old know-how has successfully been directed into
the new subject area in real estate economics• Until now the main concern has been on the
reformation of the national operations and strengthening of the bases
• Now it is time to strengthen the international cooperation and thereby international research
Current Degree Programmes
• Bachelor in Real Estate Economics• Bachelor in Geomatics
• Master in Real Estate Economics• Master in Geomatics
----------• Licentiate of Technology (lower doctoral degree)• Doctor of Technology or Doctor of Philosophy
Programme
studies
YO 20 cr
Level 2 moduleA2 20 cr
Level 1 moduleB1 20 cr
Bachelor’s Thesisand seminarK 8 + 2 = 10 cr
Elective studiesV1 10 cr
Level 1 module
A1 20 crGeneral studiesP 80 cr
Level 3 moduleA3 20 cr
Level 2 moduleB2 20 cr
SpecialmoduleC 20 cr
Elective
studiesV2 20 cr
Master’s ThesisD 30 cr
Meth
odological
princip
les10 cr
MASTER’S DEGREE PROGRAMME,
BASIC MODEL
Bachelor of Bachelor of TechnologyTechnology
Master of technologyMaster of technology
Bachelor’s Degree Programme in Real Estate Economics180 cr
General Studies80 cr
ProgramStudies
20 cr
Level 1 Modulein Real Estate
Economics A1 20 cr
Level 1 ModuleB1
20 cr
Level 2 Modulein Real EstateManagement
A2 20 cr
Level 2 Modulein Land Management
and LawA2 20 cr
Bachelor’s Thesis and SeminarK 10 cr
Elective StudiesV 10 cr
Degree Programme in Real Estate EconomicsMaster of Science (Technology) 120 cr
Level 2 Modulein Real EstateManagement
A2 20 cr
Level 2 Module in Land
Managementand LawA2 20 cr
Level 3 Modulein Real EstateManagement
A3 20 cr
Level 3 Modulein Economic
Law A3 20 cr
Level 3 Modulein Land
Management A3 20 cr
Bachelor Master of Science (Technology)
Special Module inReal EstateManagement C 20 cr
Special Module inReal Estate Investment C 20 cr
Special Module in Real Estate Economics and Valuation C 20 cr
Special Module inEconomic Law C 20 cr
Special Module inEnvironmental Law C 20 cr
Special Module inLand Management C 20 cr
Methodological principles
10 crLevel 2 ModuleB2
20 cr
Elective Studies20 cr
Master’s Thesis30 crLevel 1 Module
B1 20 cr
Exam structure for M.Sc. in Real Estate Investment &
Finance• TKK & Hanken (Swedish School of Economics and Business
Administration) offer jointly
• M.Sc. of 120 cr. (2 years)
Thesis + seminars40 cr. (30 + 10)
Core courses40 cr. (20 + 20)
Special courses20 cr.
Electibles20 cr.
Bachelor’s Thesis and Seminar 10 cr
Optional Studies 10 cr
Basic module in Geomatics A1
20 cr
DEGREE PROGRAMME IN GEOMATICSDEGREE PROGRAMME IN GEOMATICS
Basic module B1 20 cr
-RE Economics
- Information Technol.
- Imaging Technology
Advanced module in Geoinformatics A2 20 cr
BASIC MODULE ADVANCED MODULE
Basic Studies
80 cr
Bachelor in Technology
Advanced module in geodesy and photogrammetry A2 20 cr
Joint studies in the degree program
20 cr
Degree Programme in Geomatics - Master of Science (Technology) 120 cr
MASTER’S MODULE SPECIAL MODULE MASTER’S THESIS
Geodesy A3 [20 cr]
Photogrammetry and remote sensing A3 [20 cr]
Geoinformatics A3 [20 cr]
B2 [20 cr], e.g.
- RE Economics
- Information techn.
- Imaging technology
ADVANCED MODULE
Geodesy C [20 cr]
Positioning and navigation C [20 cr]
Fotogrammetry C [20 cr]
Remote sensing C [20 cr]
Cartografy C [20 cr]
Geoinformatics C [20 cr]
Master’s Thesis D [30 cr]
Optional Studies V2 [20 cr]
Scientific methodology [10cr]
The Graduate School for Real Estate, Construction and Planning KIRSU
• KIRSU incorporates knowledge of the real estate, construction and planning fields, e.g. in the areas of facilities management, real estate economics, construction economics, heating, ventilation and air-conditioning engineering, applied information technology, finance and the national economy, land management, land use planning, housing, and water management.
• Joint School with TKK, Tampere University of Technology, Hanken Business School, Turku Business School, Oulu University of Technology
• KIRSU is lead from the Institute of Real Estate Studies, chairman prof. Kari I. Leväinen.
Surveyors in Finland / employer
0
100
200
300
400
500
1950 1960 1970 1980 1990 2000 2010
NLS Other governmental Municipalities Private
REAL ESTATE STUDIES
Cadastral surveying/Land Management• maintenance of the land registration and
cadastral system
Real estate economicsand valuation
• understanding the operating mechanisms
of the real estate market
Real estate management
• organazing the management of
real estate
LAW
Law on real estate and environment Economic law
Broadening the Study Object of Real Estate Studies
1700 Rural Real Estates
1950 Urban Real Estates
1980 Housing and Property Companies
1990 Real Estate Investment Companies
2000 (Real Estate) Stock Market
2004 Real Estate Vehicles
LAND REGISTER SYSTEM
MORTGAGE
PREMISES
ENTERPRISE
REGISTRATION TO A TITLE
REAL ESTATE(IN THE CADASTRE)
PARCEL OF LAND
LEASED LAND
PERSON
BUILDING
APARTMENT
POPULATION REGISTER SYSTEM
directed at
directed at directed at
situated
situated
situated
situated
situated
lives
owns
owns
acts
owns
directed at
directedat
ENVIRONMENTAL DATA
USERS
(OTHER)INVESTMENT MARKET
$FINANCING MARKET
YEN EUR
INVESTMENT STRATEGIES
REAL ESTATE MANAGEMENT
Purchase - Occupancy - Conveyance
External environmentInternal environment
REAL ESTATE MARKET
2:13
Growth of pension capital in the EU area (INREV)
0
2000
4000
6000
8000
10000
12000
2000 2005 2010 2015 2020
billion €
There are plenty of capitals seeking for return, so competition may also be keen, and, on the other hand, e.g. a substantial fund may easily allocate a (risk) investment into a small market, which the (minor) actors in the said market cannot respond to
Future of Research at the Institute of Real Estate Studies
• In last years the research activity has increased a lot. The percentage of outside finance is about 50 % of total finance (HUT 45%, Dept. Surveying 35%)
• Our aim is to further activate the research funding. This requires bigger projects and active collaboration with other universities and research institutes.
• The number of projects with own finance have to be reduced
• Besides finance the supply of good researcher may be problematic
Surveying and Real Estate in the other European Countries
• Sweden– Royal Institute of Technology (KTH)
• Norway– Agricultural University of Norway (in Ås)– The Norwegian University of Science and
Technology (NTNU)
• Denmark– Aalborg University
Surveying in the other European Countries
• Baltic Countries
• Poland
• Slovakia
• Hungary
• Slovenia
Statutory requirements
• No act on real estate valuation, excepting– compulsory purchase
• a task of civil servants, i.e. surveyors
– real estate funds (Ltd.) • shall use an external and independent valuer
• controlled by the Financial Inspection
• no real estate funds at the moment
– mortgage banks
Valuation for mortgage banks
• Mortgage banks– new act, 2000– shall use external and independent real estate
valuers for the biggest properties credited– proposed to use authorised real estate valuers– controlled by the Financial Inspection– about 3 mortgage banks at the moment– seems not yet used external valuations
Valuation for financial statements
• EU requirement for international accounting standards (IFRS/IAS) increases the need for valuation
• Still unsure what will be the impact for external valuers but it seems that the number of external valuations is increasing
Commercial valuation
• Real estate valuation is in most cases a free occupation in Finland, i.e. can be practised without a licence
• The valuation activities are regulated by the same general provisions as the rest of business activity
• There are no specific professional requirements for commercial real estate valuers, except for certain particular situations (RE funds and mortgage banks).
Valuers in Finland• About 50 full time valuers for commercial properties in the
biggest towns
• In the housing sector the valuations mainly by real estate agents, some 2000 to 3000 persons– About 50 of them are authorised valuers
– Most of valuations are “free of charge” in connection with the housing transaction
• When giving credit for housing purchases the banks quite seldom have valuations done, but rely on their own expertise.
Organisations of real estate valuation
• There are three organisations acting in the real estate valuation sector in Finland: – The Finnish Association for Real Estate Valuation
(SKAY) – The Property Valuation Board in the Central Chamber
of Commerce – Authorized Real Estate Valuers (AKA)
• The organisations are working in a rather close co-operation
The Finnish Association for Real Estate Valuation (SKAY)
• Established in 1978
• The purpose to develop the general conditions for qualified valuation based on proper valuation methods, and promote the general knowledge of real estate valuation
• Non-profit organisation
• Member in The Finnish Scientific Association
The Finnish Association for Real Estate Valuation (SKAY)
• Member in TEGoVA 1995 - 2001– Before 1995 and from 2001 observer in the TEGoVA ; will
resigned 2006
• Observer in the International Valuation Standards Committee (IVSC)
• Participating in the Baltic Sea Area Valuation Conferences
• About 170 individual and 10 collective members
The Property Valuation Board in the Central Chamber of Commerce
• Taking care of the authorisation of valuers since 2004
• IVS Code of Conduct has been adopted for authorised valuers
Authorisations of real estate valuers
• Authorisation may be applied for in three different branches and generally: – housing (50 valuers), – commercial properties (20), – agricultural and forest properties (25),– general i.e. covering all valuation areas (65).
• Together about 160 authorised valuers• Annually they make about 3,500 valuations i.e. 22/valuer in
average• The IVS is a requirement in the authorisation examination for
general and commercial property authorisation
The Association for Authorized Real Estate Valuers
• Advancing the professional skills, promoting the familiarity, professional esteem, and supervision of interest of the authorised real estate valuers.
• Collective member in the Finnish Association for Real Estate Valuation (SKAY) and about 2/3 of the members are also individually members in the SKAY.
General (all property types) Agriculture and forest Commercial Housing
UUSIMAA372
13 21
Locality of authorised valuers
Education on Real Estate Valuation• Given at the Department of Surveying, Helsinki
University of Technology (TKK) • M.Sc. can in practice be taken in real estate valuation• Traditional value based education has been moved
towards real estate finance and international aspects• Autumn 2006 we started an English master’s
programme in Real Estate Investment and Finance jointly with the Hanken Business School
Insurances in Finland
• EVS claim professional indemnity insurance for the valuer (S 2.05 p. 13)
• In Finland such claims are not customary
• Big valuation companies have insurance, but the smaller companies and private valuers probably have not
• Insurance is not mandatory but recommended for authorised valuers
Insurances in Finland - Problems
• Nobody actually seems to know what the insurance should cover, who to compensate and what for.
• Proper insurance may not even be available.
• There are no actual legal proceedings against valuers for their liability, except for a few occasional cases.
• Since there are no specific acts relating to valuation, the compensation for potential valuation damages will rest on general legislation, such as the Securities Market Act, Penal Code, and the Act of Damages (Torts). (Kasso 2000)
Insurances in Finland - Problems
• According to the Act of Damages (Torts) one might become liable for an intentional or negligent damage to the contracting party.
• In practice the liability is often limited in the contract, as in the consulting contracts.
• When estimating the liability for damage one would likely consider the general principles and ethics of valuation, which The Finnish Association for Real Estate Valuation and The Property Valuation Board have their own rules of. The international standards might be a pointer, too.
An example of a one-family house valuation in Finland in 1991
• The value of the house was € 0.6 million according to the valuation commissioned by a bank.
• The valuation came to the owner’s notice. The owner sold his house in 1993 for FIM 0.27 million and claimed the valuer for compensation, as he had held the transaction over due to false valuation.
• The owner estimated the correct value at around FIM 0.34 million in 1991 and therefore claimed some FIM 0.25 million for the loss of the purchase price and interest.
An example of a one-family house valuation in Finland in 1991
• The Lower Court in 1994: – the valuer had been under contract to the owner, – the valuation had been unrealistic and – the damage was in causal connection. – The valuer was condemned to the compensation
of FIM 0.13 million plus interest.
An example of a one-family house valuation in Finland in 1991
• The Court of Appeal in 1996: – there neither was a contractual relationship nor
particularly cogent reasons, – the market was unforeseen, and – the damage was caused by the owner’s actions– The claim was disallowed
• The Supreme Court of Finland did not try the case in 1997.
Thank you!
[email protected] Real Estate in Finland see
http://www.tkk.fi/Yksikot/Kiinteisto/julkaisut/verkkojulkaisut/julkaisuB107.pdf