MACROECONOMICS AND ITS IMPACT ON VALUATION: INSIGHTS FOR IBBI EXAMINATION

Economic Insights for Aspiring Valuers: CEV Group’s Latest Educational Video on Macroeconomics and Valuation”

New Delhi, January 30, 2025 –In an effort to further enhance the educational resources available to valuation practice aspirants, the Council of Engineers and Valuers (CEV) and CEV IAF RVO have released an insightful video focusing on the critical macroeconomic concepts relevant to the IBBI Valuation Examination. This initiative is designed to bridge the gap between complex economic theories and their practical application in the field of real estate and asset valuation.

Core Concepts and Relevance to Valuers:
Macroeconomics is a fundamental area of study for valuation professionals, as economic conditions can have a direct impact on land and property values. The CEV Group’s video aims to break down these essential macroeconomic principles, covering the core aspects that aspiring valuers must understand to perform accurate and reliable valuations.

The video delves into several key topics, including:

1. The Role of Money: An exploration of the functions of money within an economy, discussing its role in facilitating transactions, storing value, and acting as a unit of account—crucial aspects for those assessing the value of assets.
2. Inflation and Deflation: These two opposing economic phenomena can dramatically influence asset prices. The video outlines the various types of inflation, their causes, and effects, as well as the potential consequences of deflation, which can create significant valuation challenges.
3. Savings and Investment: A discussion on how savings and investment levels in an economy determine the flow of capital, influencing property market conditions. Valuers will learn about different types of savings, the factors affecting investment, and their relationship to long-term asset growth.
4. Understanding GDP and GNP: Key indicators like Gross Domestic Product (GDP) and Gross National Product (GNP) provide insights into the economic health of a country. These metrics, along with capital formation, are vital for valuers to assess economic trends and property value shifts.
5. Impact of the Parallel Economy: The parallel or informal economy is a significant concern for valuers, as it can distort land valuation practices. The video explores how the parallel economy affects land use, real estate markets, and the construction industry.

Practical Implications for Valuers:
For valuation professionals, especially those preparing for the IBBI Valuation Examination, understanding how macroeconomic factors influence property markets is crucial. Inflationary and deflationary pressures, fluctuations in savings and investments, and the effects of the parallel economy can all impact the valuation of land and real estate.

CEV’s new video offers valuable insights on how economic trends shape the valuation landscape, providing aspirants with the knowledge they need to confidently approach the examination and engage with real-world valuation scenarios.

As the real estate and construction industries continue to evolve, staying informed about macroeconomic developments is essential for valuers. CEV Group’s video is a timely and informative resource, providing key insights into the economic factors influencing asset valuation today. Aspiring valuers are encouraged to view the video to strengthen their understanding of these critical concepts.