Valuation accuracy – the myth, expectation and reality!

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 expec...