Anyone wishing to value a condominium or terraced house will almost always encounter the comparative value method first. It derives the value of a property from the purchase prices actually paid for comparable properties and is therefore considered the most market-oriented of the three legally standardized valuation methods. We explain how the method works, where the comparable data comes from, and which properties it is best suited for.
What is the comparative value method?
The comparative value method is one of three standardized methods for determining the market value – that is, the market price – of a property. In addition to this method, the German Real Estate Valuation Ordinance (ImmoWertV) also regulates the income approach and the cost approach. The basic idea is remarkably simple: The value of a property is derived from the prices actually paid for similar properties in similar locations. The method is legally regulated in Sections 24 to 26 of the ImmoWertV.
According to Section 24 of the ImmoWertV, the comparative value is derived from a sufficient number of comparable prices. Alternatively – particularly in the case of developed land – so-called comparative factors may be used, and for undeveloped land, the standard land value may be used. The major advantage: Because real market data forms the basis, the result directly reflects current market activity.
When is the comparative value method used?
The method works particularly well whenever there are many comparable sales. This is typically the case with standardized properties:
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Condominiums in apartment buildings
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Terraced and semi-detached houses, often in new-build areas with similar houses
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Undeveloped plots, whose value is determined using the standard land value
For these properties, the expert committee for property values usually has sufficient sales cases available to draw reliable comparisons. The situation is different for a rented investment property – here, the achievable income is the primary consideration, which is why the income approach is used. If there are simply no comparable cases for an individual owner-occupied property, the cost approach is used instead, taking land and building costs into account.
Tax law also relies on Comparative values: For condominium ownership as well as single- and two-family houses, the Valuation Act prescribes the comparative value method as the primary method, for example for inheritance and gift tax (§ 183 BewG).
This is how the valuation proceeds step by step
In practice, determining a comparative value takes place in several stages.
Step 1: Select comparable properties
First, purchase prices of properties that are as similar as possible to the property being valued are used. According to § 25 ImmoWertV, the comparable properties must have sufficiently matching property characteristics – such as location, size, year of construction, features and layout – and must have been sold at times that are in sufficiently close temporal proximity to the valuation date.
Step 2: Make prices comparable
No property is exactly like another. Therefore, the comparable prices are adjusted for value-relevant differences and adapted to the market conditions as of the valuation date. If the sales took place some time ago, the intervening price development is taken into account.
Step 3: Determine the preliminary comparative value
The adjusted prices produce a preliminary comparative value. If comparative factors or a standard land value are used, this interim value is calculated by multiplying the adjusted factor by the appropriate reference quantity – for example, the living area or land area (§ 26 ImmoWertV).
Step 4: Take special features into account
Finally, special property-specific characteristics that shift the value up or down are included – such as a backlog of renovations, high-quality modernization, encumbrances or an existing right of residence. The result is the final comparative value.
Where does the comparative data come from?
The most important data source is the Committees of Valuation Experts for Property Values. Under § 193 BauGB, these independent bodies maintain what is known as a purchase-price database: Every notarized property sale in Germany is reported to them and evaluated. Among other things, they derive standard land values and comparative factors from this anonymized data.
The standard land values – average location values per square metre of land – are determined according to § 196 Building Code at least every two years, and in many regions now annually. They can be accessed via the official land value information systems (BORIS) of the federal states. Anyone wishing to delve deeper can also request a land market report or targeted comparative price information from the office of the responsible expert committee.
Advantages and Disadvantages of the Comparative Value Method
Like any method, the comparative value method has strengths and limitations. You should know these points:
- Advantage – Close to the market: It is based on prices actually paid and therefore reflects market activity particularly realistically.
- Advantage – Traceability: The derivation from actual sales is transparent and easy for non-experts to understand.
- Advantage – Official data basis: The purchase price database and land values provide a reliable foundation maintained by the authorities.
- Disadvantage – Dependence on data: If there are not enough comparable sales, for example in rural regions or for unusual properties, the method becomes inaccurate or unusable.
- Disadvantage – Individuality: Highly individual properties can hardly be meaningfully compared with others.
- Disadvantage – Valuation date: In rapidly changing markets, older comparable prices can distort the current value if the adjustment is not carried out carefully.
The official statistics show how dynamic the market is: According to the Federal Statistical Office, residential property prices rose by an average of 1.4 percent in the 1st quarter of 2026 compared with the same quarter of the previous year (Destatis). This makes it all the more important to correctly adjust the comparable prices to the valuation date.
FAQ on the Comparative Value Method
Which properties is the comparative value method suitable for?
Above all, condominiums, terraced and semi-detached houses, as well as undeveloped plots of land – in other words, wherever there are enough comparable sales. For these standardized properties, it delivers the most reliable results.
How does it differ from the income and cost approaches?
The comparative value method focuses on actual sale prices. The income approach, by contrast, assesses the achievable rental income and is suitable for income-producing properties. The cost approach adds land-and building costs and is used when comparable prices are unavailable.
How many comparable properties are required?
The law does not specify a fixed number, but requires a sufficient number of comparable prices. The more similar and recent the sales used, the fewer are required—in practice, several well-comparable cases are considered a sound basis.
Where can I obtain comparable prices and land values?
Expert committees of the municipalities provide land values through the federal states’ BORIS portals, often free of charge. You can obtain specific comparable prices and market reports—sometimes for a fee—from the office of the responsible expert committee.
Is the comparable value the same as the later sale price?
No. The comparable value is a well-founded estimate of the market value as of a specific valuation date. The price actually achieved may be higher or lower, depending on supply, demand and negotiating skills.
Conclusion: The valuation method closest to the market
The comparative value method is the first choice when a property is to be valued using real market data—especially for condominiums and terraced houses with many comparable cases. Its strength is its direct proximity to the market; its limitation is its dependence on a sufficient database. Anyone wishing to estimate the value of their property will find a reliable starting point in the official land values and the data provided by the expert committees. For a first impression, it is also worth looking at current listings of comparable properties—for example, via TraumImmo’s property search.