Is There a Residential Valuer in the House?

Mackmin, David

doi:10.1108/eb007982

Cited by 20 publications

(17 citation statements)

References 3 publications

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“…Hager and Lord (1985) posited that the range of acceptance for property valuation inaccuracy should be about 5% more or less of the average value of the subject property. Similarly, Mackmin (1985) suggested that valuation estimates produced by valuers would be acceptable if they were within ± 5% range of the property value. Furthermore, Hutchinson et al (1996) argued that a valuation estimate within 5 to 10% range is acceptable, only when it is above 10% that the estimate can be subjected to contention.…”

Section: Property Valuation Accuracymentioning

confidence: 99%

Hedonic Valuation of Real Estate Properties in Nigeria

Abidoye

Chan

2018

JARER

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Despite the wide adoption of the Hedonic Pricing Model (HPM) approach in property valuation in the real estate domain, a large number of studies conducted by real estate scholars, have tended to focus on the 'explanatory' rather than the 'predictive' ability of the technique. Given this industry focus, and thus the lack of information on the predictive nature of HPM, the present study sets out to investigate the predictive accuracy of HPM in property valuation. Data on sales transaction of residential properties were collected from registered property firms practising in the Lagos metropolis property market, in Nigeria. The collected data were divided into two categories-the training set which was fitted to the HPM developed, and the testing dataset which was used for the model validation. Accuracy metrics were used to evaluate the predictive accuracy of the HPM developed. The analysis shows that the HPM approach produced inaccurate predicted property values in terms of a high mean absolute percentage error (MAPE), mean absolute error (MAE) and root means square error (RMSE) which may not be acceptable by rational real estate investors. Also, about 60 % of the predicted property values produced an inaccuracy that is ± 20% of the actual values, while only 26% yielded an error of margin which is within the industry acceptable margin of between ± 0 and 10%. The HPM could not be entirely relied on to produce accurate property valuation estimates. Therefore, further studies are needed to be carried out to identify more reliable and robust property valuation approaches that can produce values that would be acceptable to all property valuation stakeholders.

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Section: Property Valuation Accuracymentioning

confidence: 99%

Hedonic Valuation of Real Estate Properties in Nigeria

Abidoye

Chan

2018

JARER

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“…In addition to accounting for constant quality among lot sizes, sale prices for vacant residential land in Hamilton are particularly 'noisy' . For example, error is introduced into sale prices because the price people pay for property is often ill-advised (Mackmin, 1985). Furthermore, Pollakowski warns that land registry data often contain non-arm's-length transactions in which reported prices are significantly below market levels because of a relationship between buyer and seller (Pollakowski, 1995, p. 380).…”

Section: Data and Processingmentioning

confidence: 99%

Exploring Spatial Dynamics with Land Price Indexes

Spinney¹,

Kanaroglou²,

Scott³

2010

Urban Studies

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The purpose of this study is to explore the within-region spatial dynamics of appreciation and depreciation rates using three different representations of geographical space. Mean value indexing methods are used to construct global land price indexes, sub-market land price indexes and local land price indexes using transaction price data for vacant residential land within the City of Hamilton, Ontario, between 1995 and 2003. The results are validated against Statistics Canada’s series of New Housing Price Indexes, followed by a comparison of the relative performance of the three geographical representations of land price indexes. The results indicate that the mean value indexing methods are robust, although subject to outliers and sample selection bias, and clearly illustrate the spatial dynamics of annual appreciation and depreciation rates across the study area. The results also underscore the need for regular surveillance of the spatial dynamics of urban land markets.

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“…However, one of the main issues to arise from the research into market participants was to question whether valuers do in fact interpret the market in terms of buyer behaviour. Mackmin (1985) suggests that valuers traditionally categorise variables into two broad categories, those that are "internal" and those that are "external" to the property. In contrast to the internal factors of a property, which are relatively easy to measure in the valuation process, the external factors are difficult to specify and measure.…”

Section: Valuation Of Residential Propertymentioning

confidence: 99%

Consumer behaviour in the valuation of residential property

Daly

Gronow

Jenkins

et al. 2003

Property Management

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This paper reports the results of empirical investigations that examine behavioural aspects of residential property valuations. Following the house price collapse of the late 1980s in the UK, there was considerable criticism of the valuation methods used by residential valuers. In particular for the current research, the valuation methods employed by valuers had not taken account of buyer behaviour in the valuation process, which contributed to inaccurate valuations. This research investigates both the attitudes of the consumers of residential property and the actual valuation methods used by valuers to determine whether they account for buyer behaviour accurately. The study was undertaken on a cross-national comparative basis in the UK, Ireland and Australia and pursued on a qualitative basis. Overall, the research concludes that although valuers believe that buyer behaviour is an important part of the valuation process they simply do not consider buyer preferences. In effect, valuers have reduced the valuation task to a confirmation of bid price and, because of lender pressure which occurs worldwide, valuers overlook the economic sustainability of the property asset, which has severe implications for housing markets and national economies that interact with these markets.

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Is There a Residential Valuer in the House?

Cited by 20 publications

References 3 publications

Hedonic Valuation of Real Estate Properties in Nigeria

Hedonic Valuation of Real Estate Properties in Nigeria

Exploring Spatial Dynamics with Land Price Indexes

Consumer behaviour in the valuation of residential property

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