Effects of valuation variance and inaccuracy on Nigerian commercial property market

Adegoke, O. J.

doi:10.1108/jpif-08-2014-0056

Cited by 28 publications

(55 citation statements)

References 27 publications

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“…This in turn generates suspicion about the competence and credibility of appraisers. It also creates a gateway for charlatans to enter the profession (ADEGOKE 2016;AKINJARE et al 2013). Incursions by other professionals into the realm of property valuation in Nigeria may be connected with the perception that valuations are matters of guesswork.…”

Section: Introductionmentioning

confidence: 99%

“…The average layman believes that valuers' advice is driven by the quest to earn higher fees since the payment of fees is based on assessed values. While it has been agreed that valuation is imprecise, and thus some level of inaccuracy and variation is to be expected, it is equally important to ensure that valuation is close to the sale price, so that it can play the essential role that it ought to on the property market (AYEDUN 2009;AJIBOLA 2010;ADEGOKE 2016). If this issue is not finally addressed, a widespread rejection of valuers' judgment of value may occur and impinge severely on the Nigerian valuation profession.…”

Section: Introductionmentioning

confidence: 99%

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Ranking the Causative Factors of Mortgage Valuation Inaccuracy in Kaduna Metroplois

Aliyu

Sani

Usman

et al. 2018

Real Estate Management and Valuation

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This paper is aimed at contributing to the scarce empirical literature on mortgage valuation by ranking the factors that influences mortgage valuation inaccuracy in the Kaduna Residential property market. A quantitative research approach using a survey design was adopted and structured closedended questionnaires were designed and administered to 57 registered Estate Surveying and Valuation (ESV) firms in Kaduna metropolis; 51 out of the 57 administered questionnaires were returned and used for analysis. A simple random sampling technique was employed and the 5-point Likert scale used as the scale of measurement, while causative factors were ranked using the Relative Importance Index (RII). The study analyzed the data using percentages. Findings indicated that data inadequacy, imperfection in the property market and clients’ pressure are the most trending in the absence of a unified valuation approach. The regulatory framework and valuation methodology are least contributory to valuation inaccuracy in the study area. The research will be of interest to practitioners and academic researchers interested in mortgage valuation as a guide for conducting mortgage valuation in the study area.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Ranking the Causative Factors of Mortgage Valuation Inaccuracy in Kaduna Metroplois

Aliyu

Sani

Usman

et al. 2018

Real Estate Management and Valuation

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“…Furthermore, a perceptual study by Adegoke et al (2013) noted that valuers themselves do not think their valuations are accurate and reliable. More recent studies on the subject are Adegoke (2016) and Munshifwa et al (2016). Whilst Adegoke (2016) examined the impact of valuation variance and inaccuracy on the commercial property market in Nigeria, Munshifwa et al (2016) sought to analyse the variance in rating valuations conducted by public and private valuers in Zambia.…”

Section: Review Of the Relevant Literaturementioning

confidence: 99%

The role of task complexity in valuation errors analysis in a developing real estate market

Awuah

Gyamfi-Yeboah

2017

Journal of Property Research

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Th e r ol e of t a s k c o m pl exity in v al u a tio n e r r o r s a n aly sis in a d e v elo pi n g r e al e s t a t e m a r k e t B affo u r Awu a h, KG a n d Gy a mfi-Yebo a h, F h t t p:// dx. d oi.o r g/ 1 0. 1 0 8 0/ 0 9 5 9 9 9 1 6. 2 0 1 7. 1 3 1 5 4 4 4 Ti t l eTh e r ol e of t a s k c o m pl exity in v al u a tio n e r r o r s a n aly sis in a d ev elo pi n g r e al e s t a t e m a r k e t A u t h o r s B affo u r Awu a h, KG a n d Gy a mfi-Yebo a h, F Typ e Articl e U RL This ve r sio n is a v ail a bl e a t : h t t p:// u sir.s alfo r d. a c. u k/id/ e p ri n t/ 4 4 5 3 1/ P u b l i s h e d D a t e 2 0 1 7 U SIR is a di git al c oll e c tio n of t h e r e s e a r c h o u t p u t of t h e U niv e r si ty of S alfo r d. W h e r e c o py ri g h t p e r mi t s, full t e x t m a t e ri al h el d in t h e r e p o si to ry is m a d e fr e ely a v ail a bl e o nli n e a n d c a n b e r e a d , d o w nlo a d e d a n d c o pi e d fo r n o nc o m m e r ci al p riv a t e s t u dy o r r e s e a r c h p u r p o s e s . Pl e a s e c h e c k t h e m a n u s c ri p t fo r a n y fu r t h e r c o py ri g h t r e s t ri c tio n s. Fo r m o r e info r m a tio n, in cl u di n g o u r p olicy a n d s u b mi s sio n p r o c e d u r e , pl e a s e c o n t a c t t h e R e p o si to ry Te a m a t: u si r@ s alfo r d. a c. u k .The real estate valuation literature on Sub-Saharan Africa (SSA) shows a growing concern over valuation errors especially wide variation in valuations. Although there have been increased business and investment activities in the last decade or more in the region, these valuation errors pose a challenge to the maturity of SSA real estate markets as valuations promote transparency and support efficient operation of property markets. Based on archival and survey data, as well as insights from the task complexity discourse, this study examines the extent of variations in valuations and the effect of complex valuation tasks on the levels of the variations in Ghana. The study finds high levels of variations in valuation opinions of 33.6% and 63% for the archival and survey data respectively. These levels of variations are substantially higher than have been reported in the literature for advanced markets suggesting that the concerns of valuation errors in SSA may be well grounded. Consistent with theory, it is further established that variations in valuation opinions may be more pronounced in comparatively more complex assignments. These findings have several implications including possible loss of confidence of market players in valuations, heightening of market uncertainty and increase in transaction costs.

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“…Further, it has also been noted that such inaccuracies in valuation are inevitable (Havard, 2001;Babawale & Ajayi, 2011). Such assertions point out the need for actions to ensure accuracy in valuation, given the serious impact valuations have on the profession and property market in general (Babawale & Ajayi, 2011;Adegoke, 2016). Adegoke (2016) posits that valuation inaccuracy has the potential to send wrong signals to the market and is thus likely to create future uncertainties in the property market.…”

Section: Introductionmentioning

confidence: 99%

“…Such assertions point out the need for actions to ensure accuracy in valuation, given the serious impact valuations have on the profession and property market in general (Babawale & Ajayi, 2011;Adegoke, 2016). Adegoke (2016) posits that valuation inaccuracy has the potential to send wrong signals to the market and is thus likely to create future uncertainties in the property market. The impact of valuation inaccuracy has gained the attention of Tanzanian practitioners in the valuation for mortgage lending.…”

Section: Introductionmentioning

confidence: 99%

Use of Less Relevant Heuristics in Mortgage Valuations in Tanzania

Mwasumbi

Tarimo

2019

JARER

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Valuation-surveyors, like all other disciplines, are invariably influenced by a host of factors when estimating values for different purposes. Faced with complex decision-making in valuation, many surveyors are compelled to make use of heuristics (shortcuts). The use of heuristics helps to improve information processing systems and thus increase efficiency in decision-making processes. However, the unconscious use of these shortcuts often leads to errors in selecting solutions for the problem at hand. This study was aimed at confirming the use of less relevant and less researched types of heuristics in mortgage valuations in Tanzania. These included availability heuristics, representative heuristics and positivity heuristics. The study employed a survey research method whereby a sample of 56 valuation-surveyors from valuation firms based in Dar es Salaam were given questionnaires to complete. Out of the 56 questionnaires distributed, 44 were returned. The findings revealed surveyors' propensity to use less relevant heuristics for virtually the whole valuation process. In all the identified uses of heuristics the surveyors were found to have diverted from the prescribed valuation procedure. Such behaviours have the potential for propelling the use of wrong inputs in the value assessment process and/or modifying the final assessed value. Therefore, the findings provide another explanation for the causes of the already observed valuation variance in Tanzania.

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Effects of valuation variance and inaccuracy on Nigerian commercial property market

Cited by 28 publications

References 27 publications

Ranking the Causative Factors of Mortgage Valuation Inaccuracy in Kaduna Metroplois

Ranking the Causative Factors of Mortgage Valuation Inaccuracy in Kaduna Metroplois

The role of task complexity in valuation errors analysis in a developing real estate market

Use of Less Relevant Heuristics in Mortgage Valuations in Tanzania

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