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1 – 10 of 523Austin Otegbulu and G.K. Babawale
From the perspective of plant and machinery valuation, this paper aims to assess the factors that constrain accuracy in plant and machinery valuation in the Nigerian context.
Abstract
Purpose
From the perspective of plant and machinery valuation, this paper aims to assess the factors that constrain accuracy in plant and machinery valuation in the Nigerian context.
Design/methodology/approach
This paper is based on the technical, economic and market infrastructure affecting machinery and equipment valuation in Nigeria and surveyed 150 practicing firms in Lagos to elicit from them what they believe are the major constraints to valuation accuracy.
Findings
The findings reveal that, due to lack of specialization in machinery and equipment valuation, very few valuers have sufficient knowledge content to engage in the exercise. Four significant factors are established to be contributing most to valuation inaccuracy.
Originality/value
This study is the first on inaccuracy in machinery and equipment valuation, and consequently highlights the need to equip Nigerian valuers to face the challenges of the expertise required in this specialized area of valuation.
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Masresha Belete Asnakew and Minale Kassahun Amogne
The causes of valuation inaccuracy, the approaches, basis and procedures used for value estimation were not profoundly identified in Ethiopia. Particularly, the causes of property…
Abstract
Purpose
The causes of valuation inaccuracy, the approaches, basis and procedures used for value estimation were not profoundly identified in Ethiopia. Particularly, the causes of property valuation inaccuracy for court decisions have not been assiduously studied by scholars. Hence, the ultimate goal of this study aims to identify the determinant variables of valuation inaccuracy, the approaches, basis and procedures used for court execution purposes.
Design/methodology/approach
This study employed both qualitative and quantitative approaches. The target populations of the study were the courts at the federal and regional levels. A purposive sampling technique was employed to undertake this study. The survey data was analyzed using the Relative Importance Index (RII).
Findings
The finding of this research revealed that courts have not outshined and uniform valuation manuals and guidelines that clearly state the approaches, procedures and bases of valuation. As a consequence, courts execute based on the opinion of value determined by other institutions. The insignificant numbers of independent valuation institution with the lack of uniform standards in the country prejudice the implementation of the decision of the court and faced injustice. The finding also reveals as there are several causative variables for real property valuation inaccuracy.
Practical implications
To alleviate the problem, the government should strengthen the valuation sector by creating an independent institution for advancing valuation regulation and policymaking.
Originality/value
This study was the first of all and could be a pointer for different government and non-government bodies regarding the limitations of valuation for judgment execution purposes.
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Rotimi Boluwatife Abidoye, Wei Huang, Abdul-Rasheed Amidu and Ashad Ali Javad
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…
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.
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Gabriel Kayode Babawale and Modupe Omirin
To address the phenomenon of inaccuracy in real estate valuation successfully, it is imperative to ascertain the sources and how valuers are influenced. The purpose of this paper…
Abstract
Purpose
To address the phenomenon of inaccuracy in real estate valuation successfully, it is imperative to ascertain the sources and how valuers are influenced. The purpose of this paper therefore is to identify and assess both the predictive and relative importance of the factors that significantly influence inaccuracy in residential property valuations in Lagos metropolis.
Design/methodology/approach
Data obtained from 250 firms of Estate Surveyors and Valuers were analyzed by a combination of descriptive and inferential statistics including factor analysis, and correlation/regression analysis.
Findings
The study identified: valuers' knowledge and experience; valuers' approach to valuation; and individual characteristics of valuers and valuation firms, in that order, as having significant influence on valuation accuracy in the study area.
Originality/value
If valuers know the factors that significantly influence inaccuracy and understand how they are affected, it would be possible to reduce the incidence of inaccuracy, together with its potential grave consequences to the housing market in particular, and the economy as a whole.
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In the absence of continuously traded, deep and securitised markets, commercial property valuations perform a vital function in the property market by acting as a surrogate for…
Abstract
Purpose
In the absence of continuously traded, deep and securitised markets, commercial property valuations perform a vital function in the property market by acting as a surrogate for transaction prices. The ability of valuers to make effective estimation of value is therefore a vital issue in commercial property market. The purpose of this paper is to examine the effects of valuation variance and inaccuracy on Nigerian commercial property market.
Design/methodology/approach
Questionnaires were used in collecting data from 163 randomly selected estate surveying and valuation firms in Lagos Metropolis with a record of over 60 per cent of the total population of estate surveying and valuation firms in Nigeria. Both descriptive and inferential statistics were used to analyse the data collected.
Findings
The results revealed that valuation variance and inaccuracy causes fluctuation in the price of property, sending wrong signal to the market participants and jeopardising the future of commercial property market. It also, exposed valuers to negligence liability, loss of valuers’ credibility and reduction of valuers’ integrity.
Practical implications
The paper concluded that quality data bank system is needed to obtain accurate comparables which are the cornerstone of market valuation. Also, surveyors in the academia should revisit the techniques they have developed with a view to replacing or modifying them into a format that are easy to use by practitioners. The findings of the study will be of importance to estate surveyors and valuers, estate surveying and valuation firms, government agencies in charge of property taxes as well as investors in commercial properties.
Originality/value
The paper is one of the few attempts at examining valuation variance and accuracy in Nigeria. This paper examined the effect of valuation variance and accuracy on Nigerian commercial property market.
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The purpose of this paper is to investigate the level of discrepancy in the valuation process adopted by valuers in the study area with a view to provide solution.
Abstract
Purpose
The purpose of this paper is to investigate the level of discrepancy in the valuation process adopted by valuers in the study area with a view to provide solution.
Design/methodology/approach
The study is based on both structured questionnaire and content analysis of valuation reports. In total, 185 (41 percent) structured questionnaires were randomly distributed to practicing estate surveying firms; out of 450 firms in Lagos, 173 were retrieved and used for analysis. However, the content analysis was based on 54 valuation reports on plants and equipment to investigate the extent of compliance to valuation process, standard and best practices among practitioners.
Findings
The findings from the study show that most of the practitioners lack the expertise to carry out plant and machinery (P&M) valuation, and there is evidence of poor application of methodology and lack of adherence to standards.
Practical implications
The findings from this study will reinforce the need for specialization and enforcement of standard in plant and equipment valuation practice, which will enthrone consistency, uniformity and reliability.
Originality/value
This study is the first to deal with methodology lapses in plant and equipment valuation in the study area. Ashaolu (2016) worked on the inter-disciplinary nature of plant and equipment valuation, whereas Otegbulu and Babawale (2011) worked on valuer’s perception or potential sources of inaccuracy in P&M valuation in Nigeria.
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Umar Saba Dangana and Namnso Bassey Udoekanem
The rising concern for the accuracy of residential valuations in Nigeria has created the need for key stakeholders in the residential property markets in the study areas to know…
Abstract
Purpose
The rising concern for the accuracy of residential valuations in Nigeria has created the need for key stakeholders in the residential property markets in the study areas to know the level of accuracy of valuations in order to make rational residential property transactions, amongst other purposes.
Design/methodology/approach
A blend of descriptive and causal designs was adopted for the study. Data were collected via structured questionnaire administered to 179 estate surveying and valuation (ESV) firms in the study areas using census sampling technique. Analytical techniques such as median percentage error (PE), mean and relative importance index (RII) analysis were employed in the analysis of data collected for the study.
Findings
The study found that valuation accuracy is greater in the residential property market in Abuja than in Minna, with inappropriate valuation methodology as the most significant cause of valuation inaccuracy.
Practical implications
The practical implication of this study is that a reliable databank should be established for the property market to provide credible transaction data for valuers to conduct accurate valuations in these cities. Strict enforcement of national and international valuation standards by the regulatory authorities as well as retraining of valuers on appropriate application of valuation approaches and methods are the recommended corrective measures.
Originality/value
No study has comparatively examined the accuracy of valuations in two extremely different residential property markets in the country using actual valuation and transaction prices.
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Quantitative commentaries in the UK, Australia and other developed economies have generally suggested a high level of valuation accuracy. These important findings need to be…
Abstract
Purpose
Quantitative commentaries in the UK, Australia and other developed economies have generally suggested a high level of valuation accuracy. These important findings need to be developed in other parts of the world to facilitate cross‐border property business transactions which globalization promotes. In countries like Nigeria where the property market and valuation practice are just evolving, the one‐to‐one relationship between valuations and transaction prices observed in more developed economies may not necessarily hold. This paper aims to focus on these issues.
Design/methodology/approach
This paper reviews major empirical studies on valuation accuracy with particular reference to the methodology and statistical analyses employed, the results obtained and their limitations. The paper also includes the results of an empirical study on valuation accuracy involving 250 residential properties in metropolitan Lagos, Nigeria. The paper employs error metric and econometric statistical techniques.
Findings
The study reveals, among others, that residential property valuation in Lagos metropolis exhibits inaccuracy below industry's acceptable minimum standards.
Practical implications
The credibility problem engendered by inaccurate valuation has far reaching consequences on the relevance and future of the valuation profession in the study area. Greater collaboration between professionals and academia in research, information procurement and analysis, improvement in valuers' task environment, a well articulated and encompassing mandatory national valuation standards incorporating effective enforcement machinery are some of the suggested remedial measures.
Originality/value
The study draws attention to the potentially grave implications of this result on bank solvency and the attendant negative impact on various aspects of the economy.
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This study sought to highlight the conceptual and empirical grounds precluding accuracy in property valuation thereby exposing the limitations of valuation as proxy for actual…
Abstract
Purpose
This study sought to highlight the conceptual and empirical grounds precluding accuracy in property valuation thereby exposing the limitations of valuation as proxy for actual transaction price and as basis for performance measurement for property investment. As a way of gauging the current level of awareness on the subject of valuation accuracy among Nigerian valuers (estate surveyors/appraisers) and to ascertain their response to the worldwide phenomenon, the study also included an empirical investigation of the perception of principal stakeholders in Lagos, Nigeria.
Design/methodology/approach
For primary data, the study employed questionnaire survey based on cluster sampling technique; while secondary data were sourced from existing literature and results of previous empirical studies.
Findings
“True market value” is unattainable; while valuation rarely identifies its target – the transaction price as surrogate of the “true market value”. In Nigeria, considerable gap exists between expectations and realities in valuation accuracy.
Practical implications
While efforts devoted to improving the accuracy of property valuation are laudable, the study revealed the extent to which such improvement is feasible.
Originality/value
The study suggested measures that would help Nigerian valuers hone their skills for improved level of accuracy; while funds managers and other valuation end-users are cautioned against blind use of valuations as performance yardstick for property investments.
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Irene Naliaka Cheloti and Manya Mainza Mooya
This paper examines the effects and root causes of client influence within the valuation profession in Kenya.
Abstract
Purpose
This paper examines the effects and root causes of client influence within the valuation profession in Kenya.
Design/methodology/approach
This study adopted a mixed research design incorporating a survey and experiment of registered and practising valuers in Kenya and interviews of key informants from registered and practising valuers, valuers' clients (commercial banks) and professional bodies.
Findings
The study found that client influence negatively impacts the valuation profession, contributing to inaccurate valuation outcomes, and it exists because of the valuation environment, represented by limited and unreliable information in Kenya and many other developing countries.
Originality/value
This study makes a critical contribution to the empirical literature as it introduces new insights into the impacts and causes of client influence by demonstrating how the valuation environment, characterised by poor information, contributes to client influence in Kenya, which is typical of many other developing countries.
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