Considering that institutions may rely on comparable real estate valuation indices to fill in periods where no formal property revaluation exists, in order to construct the required equally distant interval valuation points, is there any requirement or expectation to extend the historical series beyond the minimum three data points, covering the full reference period (e.g., six years for RRE and eight years for CRE)?
The reasoning underlying this question is illustrated in the following example:
RRE: Case 1 - Exclusive reliance on three data points derived from formal property revaluation exercises
Period 0: Property value at origination
Period 1: --
Period 2: --
Period 3: First formal property revaluation
Period 4: --
Period 5: --
Period 6: Second formal property revaluation
RRE: Case 2 - Use of real‑estate price valuation indices to construct the historical period
Period 0: Property value at origination
Period 1: First property value collected using real‑estate valuation indices
Period 2: Second property value collected using real‑estate valuation indices
Period 3: Third property value collected using real‑estate valuation indices
Period 4: Fourth property value collected using real‑estate valuation indices
Period 5: Fifth property value collected using real‑estate valuation indices
Period 6: First formal property revaluation
RRE: Case 3 - Use of real‑estate price valuation and indices to construct the historical period
Period 0: Property value at origination
Period 1: First formal property revaluation
Period 2: First property value collected using real‑estate valuation indices
Period 3: Second property value collected using real‑estate valuation indices
Period 4: Third property value collected using real‑estate valuation indices
Period 5: Fourth property value collected using real‑estate valuation indices
Period 6: Second formal property revaluation
- Legal act: Regulation (EU) No 575/2013 (CRR)
- COM Delegated or Implementing Acts/RTS/ITS/GLs: Not applicable
