ANALYSIS OF CONTRAINTS TO VALUATION ACCURACY FOR DIFFERENT PURPOSES IN LAGOS AND ABUJA, NIGERIA
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Date
2020-10
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Publisher
Kaduna State University Environmental Science Journal
Abstract
Accuracy of valuation exercise for various purposes has been universally emphasized in this
current dispensation and as a matter of fact, it has been given a world-wide recognition by the
World Bank, which encouraged the preparation of valuation list. The need to close the wider
gap between the market value and valuation figure necessitated this study. The study firstly
investigates inaccuracy and variance and further analyzed the factors and the extent to which
these factors have contributed to valuation inaccuracy and variance. The study utilized reports
of valuations on properties submitted to some selected banks to establish valuation variance by
comparing the actual market sales (AMS) and valuation figures of the valuation firms to
establish valuation inaccuracy. The study selected 100 and 150 estate surveying and valuation
firms with more than 10years experience in property valuation, through simple random
sampling from Abuja and Lagos. The study further selected 15 banks that constantly requesting
the valuation opinions of the selected firms in Abuja and Lagos. The result of analysis of
variance (ANOVA) confirmed that there was significant valuation variance among the estate
surveyors and valuers (F-ratio at 4.73, p-value at 0.42) and result of t-test showed that the mean
difference between AMS and valuations (at p-values less 0.05) was significant. The result of
factor analysis(FA) employed further revealed ten (10) the most emphasized groups of factors
that contributed about 92.43% variance in determining accuracy of valuation. The study
therefore recommends that all the stakeholders in property assessment and valuation exercises
should address the most emphasized factors by adhering strictly to lay-down provisions of the
profession and principles without compromise in order to achieve accuracy
Description
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Keywords
valuation accuracy, variance, inaccuracy, valuation constraints, factor analysis