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Studying Surveying and Real Estate in Finland and in some other European countries

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) 11 th May 2007. Some personal data of Kauko Viitanen (1955).

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Studying Surveying and Real Estate in Finland and in some other European countries

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  1. 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

  2. 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)

  3. 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

  4. Finland’s location in Europe Finland Area 338,000 sq.km Population 5,3 million Helsinki Area 1 million Language Finnish (Source: CIA)

  5. Department of Surveying, TKK About 550 Undergraduate Students About 140 PhD Students Degree Programme Real Estate Economics Degree Programme Geomatics Institute of Real Estate Studies 3 Professors Institute of Law 1 Professor Institute of Photogrammetry and Remote Sensing 1 Professor Laboratory of Geoinformation and Positioning Technology 3 Professors Annually about 40 master’s degrees (medium 6,5 years) and 3 doctor’s degrees (5 in 2006)

  6. 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 twoDegree Programmes • In 2005 Degree Programmes were restructured into two-cycle programmes: BSc and MSc Land Surveyor at the end of 1700

  7. 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

  8. Helsinki University of Technology Two official study options Bologna process The first surveyor Two degree programmes Curriculum reform 1633 1908 1971 1993 2000 2005 History of real estate education at TKK

  9. 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

  10. Degree Program of Geomatics and Real Estate Economics DEGREE PROGRAM OPTION MAJOR Information Science Positioning and Navigation GEOMATICS (MSc) Intake 40 Geoinformation Tecnology Geoinformatics Imaging Tecnology Remote Sensing Cartograpy Surveying and Mapping Technology Photogrammetry Geodesy Land Management RE Economics and Valuation Land Management and Law Environmental Law REAL ESTATE ECONOMICS (MSc) Economic and Real Estate Law Real Estate Management Real Estate Management RE Economics and Valuation Environmental Law Intake 50 Economic and Real Estate Law Intake 15 into Civil Engineering Construction Economics Building Materials Technology 15.8.2001 (ST d:/myfiles/koulutusohjelma1.vers 2 3)

  11. 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

  12. 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

  13. 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

  14. 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

  15. Master of technology Bachelor of Technology

  16. Bachelor’s Degree Programme in Real Estate Economics 180 cr General Studies 80 cr Program Studies 20 cr Level 1 Module in Real Estate Economics A1 20 cr Level 2 Module in Real Estate Management A2 20 cr Level 1 Module B1 20 cr Level 2 Module in Land Management and Law A2 20 cr Bachelor’s Thesis and Seminar K 10 cr Elective Studies V 10 cr

  17. Degree Programme in Real Estate Economics Master of Science (Technology) 120 cr Master of Science (Technology) Bachelor Special Module in Real EstateManagement C 20 cr Level 2 Module in Real Estate Management A2 20 cr Level 3 Module in Real Estate Management A3 20 cr Special Module in Real Estate Investment C 20 cr Special Module in Real Estate Economics and Valuation C 20 cr Level 3 Module in Economic Law A3 20 cr Special Module in Economic Law C 20 cr Level 2 Module in Land Management and Law A2 20 cr Special Module in Environmental Law C 20 cr Level 3 Module in Land Management A3 20 cr Special Module in Land Management C 20 cr Elective Studies 20 cr Methodological principles 10 cr Master’s Thesis 30 cr Level 1 Module B1 20 cr Level 2 Module B2 20 cr

  18. 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) Electibles 20 cr. Thesis + seminars 40 cr. (30 + 10) Special courses 20 cr. Core courses 40 cr. (20 + 20)

  19. DEGREE PROGRAMME IN GEOMATICS BASIC MODULE ADVANCED MODULE Basic Studies 80 cr Advanced module in geodesy and photogrammetry A2 20 cr Bachelor’s Thesis and Seminar 10 cr Basic module in Geomatics A1 20 cr Optional Studies 10 cr Joint studies in the degree program 20 cr Advanced module in Geoinformatics A2 20 cr Basic module B1 20 cr -RE Economics - Information Technol. - Imaging Technology Bachelor in Technology

  20. Degree Programme in Geomatics - Master of Science (Technology) 120 cr MASTER’S MODULE SPECIAL MODULE MASTER’S THESIS Geodesy A3 [20 cr] Geodesy C [20 cr] Master’s Thesis D [30 cr] Positioning and navigation C [20 cr] Photogrammetry and remote sensing A3 [20 cr] Fotogrammetry C [20 cr] Remote sensing C [20 cr] Scientific methodology [10cr] Optional Studies V2 [20 cr] Geoinformatics A3 [20 cr] Cartografy C [20 cr] Geoinformatics C [20 cr] ADVANCED MODULE B2 [20 cr], e.g. - RE Economics - Information techn. - Imaging technology

  21. 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.

  22. Institute of Real Estate Studies

  23. REAL ESTATE STUDIES • Cadastral surveying/ • Land Management • maintenance of the land registration and cadastral system • Real estate economicsand valuation • understanding the operating mechanismsof the real estate market • Real estate management • organazing the management of real estate LAW Law on real estate and environment Economic law

  24. Broadening the Study Object of Real Estate Studies • 1700Rural Real Estates • 1950 Urban Real Estates • 1980 Housing and Property Companies • 1990 Real Estate Investment Companies • (Real Estate) Stock Market • 2004 Real Estate Vehicles

  25. LAND REGISTER SYSTEM directed at directed at MORTGAGE REGISTRATION TO A TITLE PARCEL OF LAND directed at situated directed at REAL ESTATE (IN THE CADASTRE) situated LEASED LAND directed at situated owns owns PREMISES BUILDING situated owns PERSON acts situated ENTERPRISE APARTMENT lives POPULATION REGISTER SYSTEM

  26. External environment Internal environment ENVIRONMENTAL DATA (OTHER) INVESTMENT MARKET INVESTMENT STRATEGIES USERS $ FINANCING MARKET YEN EUR REAL ESTATE MANAGEMENT Purchase - Occupancy - Conveyance REAL ESTATE MARKET 2:13

  27. Growth of pension capital in the EU area (INREV) 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

  28. 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

  29. 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

  30. Surveying in the other European Countries • The Netherlands • TU Delft • Germany • United Kingdom

  31. Surveying in the other European Countries • Austria • TU Vienna • Switzerland • ETH • Spain • Greece

  32. Surveying in the other European Countries • Baltic Countries • Poland • Slovakia • Hungary • Slovenia

  33. VALUATION IN FINLANDProfessionEducationLiability Prof. Kauko Viitanen, PhDTaipei 11.5.2007

  34. 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

  35. 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 usedexternal valuations

  36. 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

  37. 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).

  38. Valuers in Finland • About 50 full timevaluers 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 “freeof 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.

  39. 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

  40. 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

  41. 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

  42. 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

  43. 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

  44. 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.

  45. Locality of authorised valuers General (all property types) Agriculture and forest Commercial Housing UUSIMAA 37 2 13 21

  46. 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

  47. 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

  48. 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)

  49. 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.

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