Stigma and its assessment method

This paper discusses the nature of stigma and its assessment methods. Stigma is a value loss to property value due to the presence of a risk perception-driven market resistance. Apart from affecting a contaminated or potentially contaminated property, stigma also affects the value of properties that are not contaminated but are in close proximity to a source of contamination. Although Australia is generally regarded as a clean country, however, there is also contaminated land in this beautiful country. This paper finds that stigma also exists in Australia. Since stigma is caused by risk perception, its impact on property value is difficult to quantify and market evidence cannot be used as a reliable means to assess value loss due to stigma. Regarding stigma assessment methods, this paper looks at the methods suggested by property researchers as well as those used by practising valuers. It also provides a comparison of methods used by Australian valuers and valuers in the US, UK and New Zealand. The paper finds that the methods suggested by property researchers and the methods used by Australian valuers are not satisfactory. There is a need to research for a better method to assess stigma.