Determination of the capitalization rate in the selected areas of the Czech Republic

© 2022 Published by VŠB-TU Os a a. All igh s ese ed. ER-CEREI, Volume 25: 69-75 (2022). ISSN 1212-3951 (P in ), 1805-9481 (Online) De e mina ion o he capi aliza ion a e in he selec ed a eas o he Czech Republic Hana JANÁČKOVÁa * , Jose KAŠÍKb a Depa men o Economics, Facul y o Economics, VŠB - Technical Uni e si y o Os a a, Sokolská řída 33, 702 00 Os a a, Czech Republic. b Depa men o Business Adminis a ion, Facul y o Economics, VŠB - Technical Uni e si y o Os a a, Sokolská řída 33, 702 00 Os a a, Czech Republic. Abs ac This a icle aims o calcula e he capi aliza ion a e in selec ed a eas o he Czech Republic based on da a ob ained om ac ual sales in he eal es a e ma ke . The pu pose is o make a spa ial compa ison and de e mine whe he a eas wi h highe isk le els also show highe capi aliza ion a es in line wi h heo e ical assump ions. Fo selec ed u ban dis ic s o Os a a, a compa ison o e ime was also unde aken ollowing simila esea ch ca ied ou ou yea s ago. As he capi aliza ion a e is also pa o he alua ion o dinance, a compa ison was made be ween he capi ali- za ion a e s a ed in he o dinance and he calcula ed alues. Keywo ds Capi aliza ion a e, income app oach, eal es a e, alua ion JEL Classi ica ion: R310, R210 * hana.janacko a@ sb. cz (co esponding au ho ) Ekonomická e ue - Cen al Eu opean Re iew o Economic Issues 25, 2022 70 De e mina ion o he capi aliza ion a e in he selec ed a eas o he Czech Republic Hana JANÁČKOVÁ, Jose KAŠÍK 1. In oduc ion The alua ion o eal es a e is a opical issue ha is o in e es o many people, no only in he Czech Republic (B adáč e al., 2009, 2016; O , 2014; Zaz onil, 2013) bu also wo ldwide (Be s and Glickman, 2013; Wiedeme and Bake , 2012; Wiedeme and Goe e s, 2011). A he same ime, i is a opic wi h signi ican p ac ical applica ion because, e e y day, i is necessa y o alue many pieces o eal es a e o a ious easons. These easons o he alua ion o immo able p ope y include, o example, ans e s o owne ship and inhe - i ance p oceedings, which a e associa ed wi h a p op- e y’s en y in o he land egis e , he en y o immo a- ble p ope y in o a comme cial es ablishmen , a pledge o a bank, insu ance, exp op ia ion, se lemen o dam- ages, and so on. Depending on he eason o he alu- a ion, he me hods o alua ion a e de ined acco ding o he cu en Ac No. 151/1997 Coll. on he Valua ion o P ope y. Valua ion is mainly ca ied ou using he compa ison me hod. Howe e , i a sui able sample is no a ailable on he ma ke o compa ison and/o he p ope y does no b ing he owne income/ en , one o he main me hods is he income app oach, which uses he capi aliza ion o ne ope a ing income (ne p o i / en ) o calcula e he usual p ice (ma ke alue) o he immo able p ope y. One o he key ac o s in calcula ing alue using his me hod is he app op ia e de e mina ion o he capi aliza ion a e. E en hough many a icles and pape s ha e been w i en on his opic (A dielli e al., 2016; Sla a a e al., 2014; S e ano o á and Pe e ko á, 2014; S e ano o á and P ocházka, 2014), he as majo i y o hem ha e based hei cal- cula ions no on ac ual p ices achie ed bu on o e p ices in ad e isemen s. Howe e , i is clea ha he p ice ac ually paid may di e signi ican ly om he o iginal o e p ice ( he alue demanded by he selle ). We can see a educ ion bu also cu en ly an inc ease (when he e a e so many in e es ed pa ies ha he p op- e y is sold a a highe p ice han he o iginally ad e - ised o e p ice). Thus, u he esea ch ha is being in ensi ely conduc ed in he wo ld, ocusing no only on he calcula ion o he capi aliza ion a e bu also on he main de e minan s o he capi aliza ion a e, seems o be in e es ing (La i a and Linneman, 2022). This pape de e mines he capi aliza ion a e using unbiased inpu da a o ac ual p ices based on p ice da a a ailable om he Land Regis y and en s o e a ce - ain pe iod in a selec ed ci y o minimize he inaccu acy in i s calcula ion. This capi aliza ion a e o ma ke eal es a e alua ion (speci ically la s in selec ed pa s o Os a a and in he ci ies o Ka iná and Kladno) can subsequen ly be used in hei speci ic business ac i i- ies no only by app aise s o eal es a e agencies ope - a ing in he Czech Republic unde Ac No. 455/1991 Coll. on T ade Licensing (T ade Licensing Ac ) bu also by alue expe s, app aisal o ices and app aisal ins i u es ope a ing unde special egula ions (Ac No. 254/2019 Coll.). The objec i es o his a icle can be di ided in o h ee a eas. The i s objec i e is o answe he esea ch ques ion o whe he , in line wi h heo e ical assump- ions, a eas wi h highe le els o isk (in e ms o long- un achie emen o expec ed en s) also exhibi highe capi aliza ion a es han a eas wi h lowe le els o isk. The second objec i e is o compa e he cu en le el o he capi aliza ion a e in selec ed u ban a eas o Os a a wi h he p e iously calcula ed le el (speci ically in 2018) in he same u ban a eas (Kašík and Janáčko á, 2018). Finally, he hi d objec i e is o compa e he cal- cula ed alues o he capi aliza ion a e wi h he capi- aliza ion a e es ablished in Valua ion Dec ee No. 441/2013 Coll. as amended o he legally equi ed ad- minis a i e alua ion pu poses. 2. Theo e ical basis o eal es a e alua ion Be o e we p oceed o speci ic cases ela ed o he issue o eal es a e alua ion, we conside i necessa y o de- ine he undamen al concep s and o lis he basic ap- p oaches cu en ly used in he alua ion o eal es a e no only in he Czech Republic bu also ac oss he wo ld. 2.1 Basic concep s The i s concep is eal es a e o , mo e p ecisely, im- mo able p ope y, which is de ined in Sec ion 498(1) o Ac No. 89/2012 Coll., he Ci il Code. Acco ding o his law, immo able p ope y is “land and unde g ound s uc u es wi h an independen pu pose, as well as p op- e y igh s o hem, and igh s ha a e decla ed by law o be immo able p ope y. I he law s ipula es ha a ce ain hing is no pa o he land and i such hing H. Janáčko á, J. Kašík - De e mina ion o he capi aliza ion a e in he selec ed a eas o he Czech Republic 71 canno be ans e ed om place o place wi hou io- la ing i s essence, such hing is also immo able.” O he impo an concep s o dis inguish a e p ice and alue. The p ice o immo able p ope y is he i- nancial amoun nego ia ed in he eal es a e ma ke h ough he in e ac ion o supply and demand. Value is a mo e gene al e m han p ice. The alue o an immo - able p ope y de i es om he deg ee o u ili y, ha is, he abili y o he asse o sa is y indi idual human needs, wan s o desi es. Value in he indi idual subjec- i e sense indica es ha each p ope y may ha e one o mo e u ili y alues. Fi s ly, he e is he u ili y alue o he owne : he ul ilmen o he pu pose o he immo - able p ope y o which he eal es a e was acqui ed; secondly, he e is he emo ional alue o he owne ( he p ope y was inhe i ed o dona ed, he p ope y is ied o memo ies, e c.). The immo able p ope y also has alue o o he subjec s as i is se in and in luenced by i s en i onmen . In mee ing he needs o nonowne s, immo able p ope ies can ha e social alue (hospi als, schools), cul u al alue ( hea es, cinemas, galle ies), spo s alue (s adiums, swimming pools), his o ical alue (cas les, cha eaux), eligious alue (chu ches, monas e ies, chapels), public alue ( oads, in as uc- u e, sewage ea men plan s, public buildings – o - ices, pa liamen , municipal o ices) and, las bu no leas , aes he ic alue (a chi ec u al buildings and land- ma ks). Thus, alue e lec s he p oposi ion, while p ice is he eali y achie ed in he ma ke . Value, he e o e, ex- p esses he u ili y o bene i on he da e on which he es ima e o alue is made. The opinion o he alue o a single immo able p ope y is exp essed by se e al pa ies, o example in e es ed pa ies, app aise s and selle s, whose ideas may di e and only in he cou se o nego ia ions and a he ime o he exchange will hese ideas esul in a speci ic p ice. The ealiza ion o he exchange in a ma ke en i onmen leads o he ul- ilmen o he pa ies’ expec a ions ega ding he ex- change alue, which esul s in he o ma ion o a ma - ke p ice. A he same ime, as indica ed abo e, he e a e se e al ca ego ies o alue depending on how hey a e de ined and on which p ope y o he immo able p ope y hey ocus (e.g. book alue, u ili y alue, in- come alue, ma ke alue, social alue, o e alue, e c., each o which can be exp essed in a di e en mon- e a y amoun ). The e o e, when no only aluing eal es a e, i is always necessa y o de ine he alue ha is being de e mined (Dušek, 2010). When de ining he ma ke alue, i is possible o ely on he In e na ional Valua ion S anda ds, in which he ma ke alue is de- ined as “ he es ima ed amoun o which an asse should be exchanged a he alua ion da e be ween a willing buye and a willing selle in a ansac ion be- ween sepa a e and independen pa ne s a e app op i- a e ma ke ing, in which bo h pa ies would ac in an in- o med, easonable, and non-p essu ed manne ”. The cu en Czech legisla ion as o 1 Janua y 2021 also al- eady knows he concep o ma ke alue. Ac No. 237/2020 Coll., amending Ac No. 151/1997 Coll., de- ines he ca ego y o alue as ollows: “Fo he pu - poses o his Ac , ma ke alue means he es ima ed amoun o which he p ope y o se ice should be ex- changed on he alua ion da e be ween a willing buye and a willing selle , in a comme cial ansac ion ca ied ou in acco dance wi h he ma ke de achmen p inci- ple, a e p ope ma ke ing, whe e each pa y has ac ed in an in o med and p uden manne and no unde du- ess”. In his con ex , i is wo h men ioning ha , in he Czech Republic, i is possible o dis inguish wo basic ypes o alua ion (mo e p ecisely, app aisal) o eal es- a e. Acco ding o he cu en ly alid p ac ices, hey a e called: • adminis a i e o o icial alua ion, which esul s in a p ice de e mined (adminis a- i e) acco ding o he applicable p ice eg- ula ion o Ac No. 151/1997 Coll., as amended; • ma ke alua ion, which mos o en esul s in a usual p ice (ma ke alue). Ano he concep is he capi aliza ion a e, which is gene ally de ined in he In e na ional Valua ion S and- a ds as “ he di iso (usually exp essed as a pe cen age) used o con e e u ns o alue” (In e na ional Valua- ion S anda ds Commi ee, 2007). This di iso is e y closely ela ed o he amilia p ocess o discoun ing u- u e e u ns, in which he e is ma hema ical co espond- ence be ween he capi aliza ion o mula and he dis- coun o mula o he so-called pe pe ual annui y, ha is, a heo e ically ne e -ending s eam o income o a cons an amoun . Thus, in he con ex o calcula ing he income alue o immo able p ope y, i is he numbe by which we di ide he u u e annual ne ope a ing in- come (ne p o i ) om en s o ob ain he income alue o he immo able p ope y. F om a di e en pe spec- i e (i we know he alue o he immo able p ope y and he ne income, as in he case o ou analysis), i is he ne a e o e u n o p o i abili y o he in es men (in ou case, he p o i abili y o he immo able p op- e y). The a e o capi aliza ion o adminis a i e alu- a ion pu poses is se in he cu en p ice egula ions in Annex 22 a 5.5% o la s in s anda d blocks o la s and 4.5% o la s in non-s anda d blocks o la s, wi h he possibili y o an inc ease o up o hal a pe cen age poin . Howe e , hese alues a e wi hou dis inc ion e- ga ding loca ion in he Czech Republic (Dec ee No. 441/2013 Coll.). Ekonomická e ue - Cen al Eu opean Re iew o Economic Issues 25, 2022 72 The las concep o be de ined as necessa y o cal- cula ing he capi aliza ion a e is he ne ope a ing in- come, in his case om en . The ne ope a ing income can be de ined as he di e ence be ween, on he one hand, all he income o e enues ha can be expec ed o a ise om he owne ship o he p ope y and, on he o he hand, he expenses o cos s ha a e likely o be associa ed wi h he owne ship and use o he p ope y, always ela ed o a ce ain pe iod, usually one yea (Zaz onil, 2004). The po en ial en (con ac ual o po- en ially achie ed) ha can be expec ed o be achie ed a a gi en ime and place is sub ac ed om he po en- ial en and ope a ing expenses. These cos s a e he pe- iodic, o eseeable, easonable, objec i e and o al cos s necessa y o he p ope ope a ion o he immo able p ope y, which can be expec ed o con inue o be in- cu ed a e he change o owne ship. These cos s may be di ided in o ixed and a iable cos s. Fixed cos s a e p ope y ax, insu ance, was e cha ges, managemen cos s, enewal und and so on. Va iable cos s can in- clude paymen s o u ili ies, hea ing and he like. 2.2 Basic app oaches used in he alua ion o im- mo able p ope y The basic app oaches ha can be used o eal es a e alua ion include: • cos app oach, • income app oach, • compa a i e app oach. The basic idea o he cos app oach is ha he alue o an immo able asse can be de i ed om he amoun ha we would cu en ly ha e o spend o build he pa - icula immo able p ope y, aking in o accoun i s physical and mo al dep ecia ion. The income app oach ocuses on he amoun o he achie able u u e income s eam om he immo able p ope y (ne en al income o p o i ), which is discoun ed o he p esen alue us- ing a capi aliza ion a e. The compa a i e alua ion (app aisal) app oach is pe o med by compa ing he p ope y wi h simila eely saleable p ope ies sold a he same ime and place based on a numbe o aspec s: ype and pu pose, layou , ma e ials, echnical pa ame- e s, quali y o design, a ailabili y, size, usabili y, loca- ion in he a ea and mani es a ions o he su oundings. Fo he usual p ice, he compa ison includes he sale p ices, and o he ma ke alue, i includes he o e p ices ( alues) om eal es a e se e s. This pape will use he compa a i e and income ap- p oaches, speci ically he income alue and compa a- i e alue me hods, which a e desc ibed in de ail in he ollowing sec ion. 3. Me hodology and da a used This a icle will use he ac ual achie ed p ices o eal es a e (speci ically la s in p i a e owne ship), which ha e been de i ed om achie ed p ice da a om he Land Regis y, o de e mine he capi aliza ion a e used in income p ope y alua ion. A compa a i e app oach will be used o selec he sample o dwellings. A basic ela ionship can be used o calcula e he income alue: 𝑉𝐻 =𝑧 𝑢 (1) whe e 𝑉𝐻 is he calcula ed income alue o he p op- e y, 𝑧 is he ne en al income pe yea and u is he an- nual capi aliza ion a e a a gi en loca ion and ime. The capi aliza ion a e can hen be de i ed by knowing he ac ual p ices o speci ic p ope ies a a gi en place and ime and he amoun o ne en al income (B adáč, 2008): 𝑢𝑖=𝑧𝑖 𝐶𝑃𝑖 (2) whe e 𝑢𝑖 is he calcula ed capi aliza ion a e, 𝑧𝑖 is he ne en al income and 𝐶𝑃𝑖 is he sale p ice (all o he speci ic p ope y). Based on hese indi idual calcula- ions, we can hen calcula e he a e age capi aliza ion a e a a gi en loca ion and ime as: 𝑢 = ∑𝑢𝑖 𝑛 𝑖=1 𝑛 (3) whe e 𝑛 is he o al numbe o p ope ies. Fo he analysis, ac ual da a on eal es a e p ices achie ed in he second hal o 2021 and he i s hal o 2022 in selec ed a eas o he Czech Republic we e used om nego ia ed p ices a ailable om he Land Regis- y. Indus ial ci ies we e included in he compa ison. Speci ically, he s a u o y owns o Ka iná and Kladno and selec ed dis ic s o Os a a we e included. Ka iná and Kladno ha e a 30-minu e (app ox. 30 km) com- mu e o a majo ci y (Os a a and P ague). Selec ed u - ban dis ic s o he S a u o y Ci y o Os a a (Po uba and Os a a Sou h) we e included o compa ison o e ime wi h 2018, when simila esea ch was conduc ed. Fo he calcula ion o he capi aliza ion a e, p i a ely owned one-bed oom o wo-bed oom la s anging om 53 m2 o 78 m2 (sui able o amilies) in high- ise panel blocks o la s wi h a li buil om he 1970s and 1980s onwa ds ( his is he so-called second-hand ma - ke o la s) we e selec ed in all he ci ies. We excluded sales associa ed wi h he e ec s o ex- ao dina y ma ke ci cums ances, he pe sonal ci cum- s ances o he selle o buye and he e ec s o special conside a ion, no s a ed p ice o ans e s o coope a- i e owne ship o pe sonal owne ship. Table 1 shows he numbe o la s in he selec ed a eas ha we e in- cluded in he calcula ion o he capi aliza ion a e. H. Janáčko á, J. Kašík - De e mina ion o he capi aliza ion a e in he selec ed a eas o he Czech Republic 73 Table 1 Numbe o selec ed la sales in selec ed a eas o he Czech Republic A ea Numbe o sale p ices o la s Ka iná 25 Kladno 25 Os a a – Sou h 30 Os a a – Po uba 30 To al 110 We used simila c i e ia o hose employed o sam- ple sales p ices o compa e en s. The a ea o he la in m2 and he ne en pe m2 we e a ailable; we ob ained hese da a h ough ou esea ch om o e s om es a e agen s and concluded en al ag eemen s. 4. Resul s Table 2 clea ly shows he esul s, i.e. he calcula ed a - e age p ices, en s, and capi aliza ion a es in he se- lec ed a eas. Table 2 A e age capi aliza ion a es in selec ed egions o he Czech Republic A ea A e age selling p ice (CZK/m2 ) A e age mon hly. en (CZK/m2 ) A e - age capi al- iza ion a e (%) Min. and max. cap- i aliza ion a es (%) Ka iná 23,208 113 5.80 4.30-8.60 Kladno 74,286 249 3.90 2.40-5.20 Os a a Sou h 43,590 164 4.50 3.53-5.92 Os a a – Po uba 54,128 160 3.75 2.83-4.35 Os a a Sou h (2018) 21,411 80 4.522 3.98-5.69 Os a a – Po uba (2018) 24,956 80 3.885 3.18-4.48 Sou ce: The au ho s’ own elabo a ion and calcula ions, da a on eques om he Land Regis y, KAŠÍK, J., JANÁČKOVÁ, H. (2018) The ollowing conclusions can be d awn om he abo e able. A compa ison o he s a u o y ci ies o Ka iná and Kladno shows ha he ci y wi h he highe a e age capi aliza ion a e is Ka iná. This conclusion is consis en wi h he heo e ical assump ions ha eal es a e loca ed in a eas wi h a highe isk le el (in his case, he isk associa ed wi h achie ing he expec ed en ) has a highe capi aliza ion a e. S a is ics om he Minis y o Labou and Social A ai s show ha , in June 2022, he sha e o unemployed pe sons (SUP) in Ka iná was 9.9%. In con as , in Kladno, he alue o he same indica o in June 2022 was 5.1%. The a e age g oss mon hly sala y in he Cen al Bohemian Region in Q4 2021 was CZK 40,501 and was mo e han CZK 4,000 highe han ha in he Mo a ian–Silesian Re- gion, whe e i was CZK 36,463. The s a is ics also show a highe numbe o o ences and selec ed c imes egis e ed by he Police o he Czech Republic in he ci y o Ka iná, namely one c ime o ence pe 1,000 inhabi an s in Ka iná and 96 o ences pe 1,000 inhab- i an s in Kladno (Police o he Czech Republic, 2022). As a as he selec ed pa s o Os a a a e con- ce ned, he a ea wi h he highes p ices pe m2 and he lowe capi aliza ion a e is Po uba, and his has no changed o e ime. I is a highly desi able a ea. I is a cadas al a ea in he wes e n cen e o he egional ci y, wi h excellen accessibili y o all classes o oads and widesp ead and equen public anspo ( ams and buses), all ci ic ameni ies, including o ices, cou and an indoo and an ou doo swimming pool as well as el- a i ely clean ai due o i s highe loca ion on he hill and dis ance om LIBERTY Os a a a.s. (known as “No á huť”). The capi aliza ion a es ela i e o he ne en le el a e lowe han in he second selec ed a ea, Os a a Sou h. Os a a Sou h has lowe p ices pe m2 and, a he same ime, highe capi aliza ion a es. I is he sou h- e n pa o he egional ci y. This a ea also has all he ameni ies and quick access o he egional ci y cen e. Howe e , he e a e in amous esiden ial ho els housing a socially weak and maladjus ed popula ion due o he de elopmen o he housing supplemen sys em in he Czech Republic. Os a a Sou h is also close o a la ge indus ial en e p ise emi ing ai pollu an s and has a lowe al i ude (and hence a highe equency o smog han Po uba). In he selec ed ci ies, he iskies a eas ha e a capi- aliza ion a e o up o 8.6% and hus a payback pe iod sho e han 12 yea s. The lowes capi aliza ion a es oday a e 2.4%, and he payback pe iod o buying a home is o e 40 yea s. When compa ing he calcula ed alues wi h he cap- i aliza ion a e, which is se a 5.5% in Annex 22 o he cu en p ice egula ion o la s in s anda d blocks o la s o he pu poses o adminis a i e alua ion, we ind ha he closes o his alue is in he ci y o Ka - iná, whe e he calcula ed a e age capi aliza ion a e eaches 5.8%. In he ci y o Kladno, he capi aliza ion a e in he p ice egula ion is only close o he uppe ange o he calcula ed alues. In addi ion, in he se- lec ed dis ic s o Os a a, he calcula ed alues o he capi aliza ion a e di e ela i ely om he alue o i- cially es ablished by he alua ion dec ee. As a as he Ekonomická e ue - Cen al Eu opean Re iew o Economic Issues 25, 2022 74 compa ison o e ime in his a ea is conce ned, i can be deduced om he calcula ed alues ha he p ices o la s ha e mo e han doubled in ou yea s and he o e p ices o en s ha e doubled. The capi aliza ion a es ha e emained almos unchanged o e ime in he se- lec ed a eas o Os a a. 5. Discussion The esul s ob ained a e di icul o compa e wi h hose epo ed in some p e iously published s udies on a sim- ila opic (A dielli e al., 2016; S e ano o á and Pe- e ko á, 2014; S e ano o á and P ocházka, 2014). As al eady men ioned in he in oduc ion, unlike he e- sea ch men ioned abo e, ou analyses a e based on ac- ual p ices ob ained om he Land Regis y da a. Fu - he mo e, i should be poin ed ou ha some s udies (e.g. A dielli e al., 2016) ocused on he calcula ion o g oss capi aliza ion a es; ha is, hey did no include he cos s associa ed wi h holding eal es a e (main e- nance, insu ance, eal es a e ax, e c.), and his is one o he easons why hei esul s a e highe (e.g. his g oss capi aliza ion a e is be ween 4.1% and 8% o Po uba and be ween 8.1% and 12% o H abů ka and Výško - ice). Ano he impo an ac o is ime, wi h he econ- omy ha ing expe ienced a educ ion in base in e es a es in he pas , which ended a he beginning o 2021. The g ow h in p ope y p ices is slowing and is g adu- ally being accompanied by an inc ease in en al p ices, p ima ily due o he long- e m na u e o ime-lagged leases. Since 2020, he Czech Republic has been acing iscal expansion in he o m o la ge s a e budge de i- ci s. F om 2021 onwa ds, economic en i ies ha e aced a global inc ease in ene gy p ices, which has also led o he collapse o Czech p o ide s wi h a signi ican ma - ke sha e. Las bu no leas , he Czech Republic is ex- pe iencing an ex e nal shock s emming om he e ec s o he wa in Uk aine. The ac s men ioned abo e and p essu es in he labou and p ope y ma ke s a e push- ing consume p ice g ow h o 17.2% (annual a e as o June 2022 as measu ed by he Czech P ope y In es - men ), he as es in h ee decades (Czech S a is ical O - ice, 2022). Wi h he cu en high in la ion a e and he Czech Na ional Bank aising in e es a es, we can see a cooling o he mo gage ma ke in 2022, which is as- socia ed wi h a slowdown in p ope y p ice g ow h. This has educed he eal e u n on mos cu en in es - men s and hus also on esiden ial in es men s, which may be nega i e in he sho e m. I appea s ha he objec i e o eal es a e in es o s a he momen may e- main he app ecia ion o in es ed unds h ough en al income and hus he p o ec ion o a ailable unds agains alling in la ion a es bu also possible specula- ion linked o he inc ease in he p ice o eal es a e o e ime and he inc ease in he e u n on he sale o eal es a e in he u u e, which, howe e , may be highly un- p edic able gi en he cu en in la ion and he associ- a ed unce ain y in he ma ke s. 6. Conclusion The capi aliza ion a e is a necessa y inpu in he calcu- la ion o he income alue o p ope y. The au ho s o he pape de e mined he capi aliza ion a e o p i- a ely owned la s in selec ed ci ies (Ka iná and Kladno) and selec ed u ban dis ic s o Os a a (Po uba and Os a a Sou h) based on ac ual p ices and ne en s as well as he capi aliza ion a e o he gi en ype o eal es a e in 2021 and 2022 using he di ec capi aliza- ion me hod. The pu pose was o compa e he calcu- la ed capi aliza ion a es in he selec ed a eas and o ex- plain any di e ences in hei amoun in e ms o space and ime in he u ban dis ic s o Os a a. The esul s con i med he in luence o p ice ( he le el o demand o eal es a e in a gi en a ea) and isk ( he mo e a ac- i e he a ea, he lowe he isk) on he capi aliza ion a e. In less isky a eas, whe e p ices a e ela i ely highe , he capi aliza ion a e is lowe han in ela i ely iskie a eas. This ac is e lec ed bo h when compa - ing he ci ies o Ka iná and Kladno and when compa - ing pa s o Os a a. The esul ing capi aliza ion a es can be used in alua ion p ac ice when calcula ing he usual p ice (ma ke alue) o immo able p ope y. Re e ences ARDIELLI, E., ARDIELLI, J., SLAVATA, D. (2016). Calcula ion and Spa ial Dis ibu ion o Capi aliza ion Ra es in he Selec ed Segmen o Reali y P ope ies, In- e na ional Jou nal o En ep eneu ial Knowledge 4: 37-50. BETTS, R. M., GLICKMAN, J. A. (2015). Basic Real Es a e App aisal. 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