A Comparative Study of Valuation Variance and Accuracy between Nigeria and UK

Effiong, James Bassey

doi:10.18052/www.scipress.com/ilshs.57.94

Cited by 18 publications

(53 citation statements)

References 15 publications

(21 reference statements)

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“…Variance differs from inaccuracy because it assesses the degree of divergence in opinion of value amongst different valuers whilst the latter reflects divergence from actual market value. The recommendations of researchers (see for example Ogunba & Ajayi, 1998;Olaleye, 2004;Aluko, 2007;Effiong, 2015) on these two issues indicate a commonality of opinions in support of a centralised property data bank managed by the Nigerian Institution of Estate Surveyors and Valuers. This common recommendation points at data input as a factor in inaccuracies and variances.…”

Section: Valuation Accuracy and Valuation Variancementioning

confidence: 99%

“…Despite the distinction made between inaccuracy and variance, the commonality of opinions on data banking suggests that they are two sides of the same coin. Given the call for valuation standards by Effiong (2015), data banks alone cannot guarantee that valuations will be more accurate, but they may bring about a reduction in these occurrences (Ajibola, 2010). If a valuation was analogous to a manufactured product such as a medical device which must be safe and effective in use, its successful making would require a combination of quality control and quality assurance in accordance with good manufacturing practice (ISPE, 2020).…”

Section: Valuation Accuracy and Valuation Variancementioning

confidence: 99%

“…Hence, without accessible and reliable data to facilitate accurate valuations, optimal investment advice cannot be given by valuers (Ajibola, 2010;Adegoke, 2016). Many authors have highlighted the existent data inadequacy for property valuations in Nigeria (Ogunba & Ajayi, 1998;Olaleye, 2004;Aluko, 2007;Effiong, 2015;Obayomi, 2018). The Jones Lang LaSalle (JLL) Global Real Estate Transparency Index (2018) also underscores this view by its finding that Nigeria has "a low transparency" which diminishes its global competitiveness.…”

Section: Introductionmentioning

confidence: 99%

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A Review of the Property Data Challenge in Nigeria

Onwuanyi

2020

JARER

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Data on Nigeria’s property sector tends to be inadequate and inaccessible. While the government produces statistics for its own activities, such as GDP and inflation rates, other sectors function with insufficient information. This is particularly true for Nigeria’s property sector and its data which have been given a lesser status despite an increasing economic importance for investment opportunity, GDP contribution and attraction of foreign investment funds. The gap in data creates a challenging situation for property valuers, but also, an opportunity for property researchers. This paper, which reviews existing literature on the subject, is a contribution to the debate as well as an effort towards a solution. The literature stipulates that poor accessibility to property data leads valuers to enact coping mechanisms rather than best practice and that property data is synonymous with market transactions which makes it invaluable to valuers. Also, there is a convergence of views in the reviewed literature that a central data bank offers opportunities for a solution. Conversely, it is here argued that focusing on market transactions is a narrow understanding of data as property data extends beyond such transactions. This school of thought believes that the users and uses of property transaction data extend beyond valuers and valuations and that the central data bank recommendation requires examination as to its feasibility. Accordingly, this paper broadens the definition of property data by recognising the existence of non-market data, by identifying its other users and uses as well as its role in socio-economic policies. The considerable doubts associated with the central data bank recommendation leads the study to make recommendations which are novel, but nevertheless, hold holistic methods for addressing Nigeria’s property data challenge.

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Section: Valuation Accuracy and Valuation Variancementioning

confidence: 99%

Section: Valuation Accuracy and Valuation Variancementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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A Review of the Property Data Challenge in Nigeria

Onwuanyi

2020

JARER

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“…The topic of valuation accuracy, reliability and variance has been a focus of research in the real estate profession for quite some decades now (ROSSINI 1999;KUCHARSKA -STASIAK 2013). Debate on valuation accuracy continued to receive attention from the academia, practitioners and other stakeholders in the real estate business circle, triggered by the pioneer works of HAGER and LORD (1985), who invited valuers to value two properties in the UK, the result of which provided for the range of +/-5 on either side of the correct value.…”

Section: Literature Reviewmentioning

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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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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“…This highlights that valuation inaccuracy is an area of global academic discussion, especially with focused consideration on specific implications of the accuracy/inaccuracy of valuations. Most studies on valuation accuracy have centered on the margin of valuation inaccuracy permissible in comparison with the actual sales price (Boyd & Irons, 2002;Ayedun et al, 2014;Hironen et al, 2014), factors influencing valuation inaccuracy (Ajibola, 2010;Ayedun et al, 2014;Effiong, 2015) and client's influence on valuation (Adegoke, Olaleye & Oloyede, 2013;Akerele & Thomas, 2014). This has left a research gap regarding the examination of the factors that influence valuation inaccuracy and the effect of valuation inaccuracy on real property investment performance.…”

Section: Introductionmentioning

confidence: 99%

Valuation Inaccuracy: Implication on Commercial Property Investment Performance in Akure, Nigeria

Eziukwu

2019

JARER

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Issues of valuation error have become one of the most significant challenges of the valuation profession lately. The derivation of property returns from commercial income and prices actually paid has cast a lot of doubt on the reliability of valuation opinion in the commercial property investment decision process. This study investigates the implication of valuation inaccuracy on investment performance of commercial properties in Akure, Nigeria. Questionnaires were administered to 25 registered and practicing Estate Surveyors and Valuers (ESVs) in Akure and 19 duly filled questionnaires were returned for analysis. Descriptive analysis was used to assess the level of inaccuracy and the factors influencing the valuation inaccuracy, while regression analysis was used to examine the effect of this inaccuracy on investment performance. It was discovered that the most common level of valuation inaccuracy in Akure is ±11-15% which is above the acceptable range of ±5%. It was also discovered that the various assumptions made by the valuers and the market indices used in carrying out valuation have the highest influence on the inaccuracy discovered in their valuation. From the simple linear regression analysis carried out, it was found that valuation inaccuracy has negative implication, at β=-.800, t=3.873, p>.05 on the investment performance. This shows that the higher the level of inaccuracy of valuation, the lower the performance of the investment. The result, however, indicates that the effect of valuation inaccuracy on commercial property investment performance is statistically insignificant. This study recommends that valuers in Akure should be very careful in making assumptions and be more vigilant regarding their use of market indices for valuations. It also recommends that valuers should be aware that investors rely on the accuracy of their valuations for making timely investment predictions and should therefore ensure conscientious efforts are put in place for accuracy of their valuations.

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A Comparative Study of Valuation Variance and Accuracy between Nigeria and UK

Cited by 18 publications

References 15 publications

A Review of the Property Data Challenge in Nigeria

A Review of the Property Data Challenge in Nigeria

Ranking the Causative Factors of Mortgage Valuation Inaccuracy in Kaduna Metroplois

Valuation Inaccuracy: Implication on Commercial Property Investment Performance in Akure, Nigeria

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