In the article, the role of demand and supply in the theory of value and valuation is discussed using the case of the real estate market. The research hypothesis tested is that demand is dominant in the valuation process. The purpose of the article is to present evidence in support of the research hypothesis and to explain why real estate valuations need the investor-oriented model of valuation. A critical analysis of the pertinent literature and legislation and the observation method were employed to this end. The need to use the investor-oriented model for real estate valuation is discussed based on: (1) the residual (development) method; (2) the valuation of properties’ potential; and (3) the valuation of a subdivided property to calculate an adjacency fee. The matter under consideration is important not only for theoretical deliberations but also for the practice of real estate valuation and management.