Based on Prudent PrinLong-term Sustainable Value Assessment of Real Estate ciples: Construction and Empirical Test of PVF Model

Hongrui Li

doi:10.47297/wspceWSP2516-251907.20250905

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Based on Prudent PrinLong-term Sustainable Value Assessment of Real Estate ciples: Construction and Empirical Test of PVF Model

Volume 9, Issue 5

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Based on Prudent PrinLong-term Sustainable Value Assessment of Real Estate ciples: Construction and Empirical Test of PVF Model
Based on Prudent PrinLong-term Sustainable Value Assessment of Real Estate ciples: Construction and Empirical Test of PVF Model
Dongyang Foreign Language School, Jinhua, Zhejiang, 322110, China
Vol. 9, Issue 5, Pages: 32-37(2025)
Published：30 October 2025
DOI：10.47297/wspceWSP2516-251907.20250905
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Li Hongrui.Based on Prudent PrinLong-term Sustainable Value Assessment of Real Estate ciples: Construction and Empirical Test of PVF Model[J].Creative Economy,2025,09(05):32-37.
DOI：

Li Hongrui.Based on Prudent PrinLong-term Sustainable Value Assessment of Real Estate ciples: Construction and Empirical Test of PVF Model[J].Creative Economy,2025,09(05):32-37. DOI： 10.47297/wspceWSP2516-251907.20250905.

摘要

Abstract

This study addresses valuation biases in real estate finance arising from the exponential growth assumptions in traditional Discounted Cash Flow (DCF) models. We propose the Prudent Value Framework (PVF)

which incorporates a linear growth factor grounded in prudential principles to better reflect long-term sustainable value. Through multi-scenario simulations across different holding periods and market conditions

the PVF yields significantly more conservative and stable valuations

particularly during market downturns (mean Δ = –8.3%

p < 0.01) and over longer investment horizons. The framework enhances adaptability to market cycles and supports financial institutions in complying with Basel III LTV requirements by providing a robust

principle-based valuation tool.

关键词

Keywords

references

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