TITLE:
Depreciation of the Economic Value of Historic Properties
AUTHORS:
Svetlana Albu, Ion Albu
KEYWORDS:
Real Estate, Valuation, Cost Approach, Physical Wear, Functional Depreciation, Economic Depreciation
JOURNAL NAME:
Open Journal of Applied Sciences,
Vol.11 No.11,
November
30,
2021
ABSTRACT: Historic properties are cultural, historic and/or
architectural heritage assets that may have legal or statutory protection due
to their cultural and economic importance. Often the real estate with a certain
historical value is privately owned, and the owners request the estimation of
the value of these properties, either for advisory purposes, or to gage the
property for the purpose of lending, or for other purposes. In this research,
the authors, within the framework of the cost approach, analyze the peculiarities of estimating the depreciation
of the economic value of real estate properties with historic/architectural
value. The emphasis is placed on the methods of estimating the physical
depreciation and it is recommended to apply them depending on the condition of
the construction and the use or non-use of the real estate for a long time. Based
on a case study, the authors explain the paradox of the value of real estate
with advanced age located in compact historical areas.