To read the full version of this content please select one of the options below:

An updated survey of factors influencing property valuation accuracy in Australia

Rotimi Boluwatife Abidoye (Faculty of Built Environment, UNSW, Sydney, Australia)
Wei Huang (Faculty of Built Environment, UNSW, Sydney, Australia)
Abdul-Rasheed Amidu (Department of Property, University of Auckland, Auckland, New Zealand)
Ashad Ali Javad (School of Economics and Finance, Massey University, Palmerston North, New Zealand)

Property Management

ISSN: 0263-7472

Article publication date: 15 February 2021

Issue publication date: 28 April 2021

598

Abstract

Purpose

This study updates and extends the current work on the issue of accuracy of property valuation. The paper investigates the factors that contribute to property valuation inaccuracy and examines different strategies to achieve greater accuracy in practice.

Design/methodology/approach

An online questionnaire was designed and administered on the Australian Property Institute (API) registered valuers, attempting to examine their perceptions on the current state of valuation accuracy in Australia. The variables/statements from responses are ranked overall and compared for differences by the characteristics of respondents.

Findings

Using mean rating point, the survey ranked three factors; inexperience valuers, the selection, interpretation and use of comparable evidence in property valuation exercise and the complexity of the subject property in terms of design, age, material specification and state of repairs as the most significant factors currently affecting valuation inaccuracy. The results of a Chi-square test did not, however, show a significant statistical relationship between respondents' profile and the perception on the comparative importance of the factors identified. Except for valuers' age and inexperience valuers and valuers' educational qualification and inexperience valuers and the selection, interpretation and use of comparable evidence in property valuation exercise. Also, the three highly ranked strategies for reducing the level of inaccuracy are: developing a global mindset, use of advanced methodology and training valuers on market forecasting skills.

Practical implications

In order for valuers to provide state-of-the-art service to the public and to remain relevant, there is a need to accurately and reliably estimate valuation figures. Hence, the strategies highlighted in this study could be considered in a bid to reduce property valuation inaccuracy in practice.

Originality/value

This study provides an updated overview of the issue of property valuation inaccuracy in the Australia valuation practice and examines the strategies to reduce it.

Keywords

Acknowledgements

The authors would like to appreciate the Australian Property Institute (API) for assisting in the administration of the questionnaire survey. Also, the authors wish to express their gratitude for the API registered valuers who generously participated in the online survey. Finally, the valuable comments of the anonymous reviewers are much appreciated.

Citation

Abidoye, R.B., Huang, W., Amidu, A.-R. and Javad, A.A. (2021), "An updated survey of factors influencing property valuation accuracy in Australia", Property Management, Vol. 39 No. 3, pp. 343-361. https://doi.org/10.1108/PM-02-2020-0014

Publisher

:

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

Related articles