RELIABILITY AND CONSISTENCY OF THE INVESTMENT METHOD OF VALUATION: A STUDY OF LAGOS METROPOLIS

Against the recent increasing criticism against the reliability and consistency of investment method of valuation practice in the country, this study examined the professional ability of estate surveyors and valuers at interpreting the selling prices of residential properties in the open market in the Lagos metropolis with a view to either invalidate or validate the claim. In an attempt to satisfy the objective of the study, questionnaires backed up with interviews, were administered on a sample of randomly selected 127 estate surveying and valuation firms out of the 228 registered firms in Lagos Metropolis while questionnaires equally backed up with interviews were also administered on a sample size of 91 randomly selected property companies out of 137 identified institutional property companies obtained from the directory of real estate business operating within the study area and the entire 25 commercial banks operating in Lagos metropolitan area. Secondary data of the valuation estimates and sale prices of Federal Government landed properties sold in 2006 were obtained from Ad hoc committee set for the purpose and Nigeria Punch newspaper of 5th February, 2007. Data obtained were analyzed with the use of parametric and non-parametric statistics consisting of frequency distribution, range, interquartile range, mean, mean deviation from market price, standard deviation and regression analysis. The result of all the statistical tests revealed firstly, that valuation estimates were not a good proxy for transaction market prices and secondly, that valuation estimates of one firm not good proxy for contemporaneous valuations of other firms in Lagos. Client influence was identified to have had negative impact on valuation outcome. The study also revealed that various inputs used for investment valuations are not market derived and this phenomenon could account for valuation inaccuracy and inconsistency. Also, the study revealed that valuers in Lagos metropolis do not have a standardized approach to determination of valuation inputs and this could account largely for lack of consistency amongst the valuers and moreover there is problem of lack of up-to-date property databank to assist the valuers in determining the inputs to use for investment valuation assignments. Conclusions from the study are that investment method of valuation as currently used is not properly applied in Lagos metropolis, hence has failed to produce valuation estimates that could serve as good proxies for both market sale transaction prices and contemporaneous valuations of other firms. The ranges obtained for all the twelve sample properties were higher than the acceptable range of ±10% adopted for this study. Following from the foregoing, the study recommended among other suggestions maintenance of up-to-date property databank by both national and state chapters of Nigerian Institution of Estate Surveyors and Valuers, review of valuation Guidance Notes to ensure greater uniformity in approach and accuracy of investment valuations from the valuers/

An Assessment of the Effect of Remuneration on the Construction Performances of the Professionals in the Nigerian Building Industry

Construction professionals are the authors on one hand and co-executors of construction projects on the other, therefore, the quality of the services expected of them in construction project delivery as environmental resource manager is key. This paper investigated whether quality of service of the construction professionals in Nigeria is influenced by the level of professional fees receivable for services rendered hence their resource management role. The determinants of service quality are identified and their means of evaluation examined using the SERVQUAL; instrument used for measurement of the service quality on responses got from a set of questionnaires administered on the construction stakeholders comprising of the construction clients on one hand and the construction professionals on the other hand in Lagos, Nigeria with a view to assessing the perception of the clients regarding the quality of services being received from their construction professionals vis-a-vis clients expectations. The study revealed that there was no significant relationship between the level of fees paid and the quality of service rendered by the construction professionals as the result of the analysis of variance between service quality gap and the various methods of fees paid is not reflected in the service quality of construction professional

Issues and Challenges Militating against the Sustainability of Affordable Housing Provision in Nigeria

Housing all over the world has remained an interdependent phenomenon that affects every facet of mankind. Its importance is so pronounced that it imparts on the social, physical and mental wellbeing of man irrespective of his socio-economic status, color or creed. It represents of the most basic human needs and has no doubt impact on the health, welfare and productivity of the individual. In spite of the importance of housing to mankind, there is however, a universal shortage of needed dwelling units especially in developing countries including Nigeria where population growth and urbanization are rapidly on the increase and where the gap between housing supply and housing demand is so wide. This paper critically appraises the contemporary housing and the role of government in the provision of housing in the country. It places in context public housing policies and programmes as they affect the development of housing at the turn of the country. The paper proposes initiatives to address the country’s monumental housing needs through the provision of enable environment which will make the resources required for acquisition housing to majority of the citizenry accessible

Empirical Verification of the Clients' Perception of the Adequacy of the Valuation Reports of Nigerian Valuers

The issue of professional valuation standards and quality of valuation reports has been subject of intensive debate at both local and international/eve/ in recent years. Studies on the subject of clients' perception of the quality of valuation reports have been extensively carried out in countries like UK, Australia and the US. However, the topic has not received much attention in most developing countries such as Nigeria. The purpose of this paper is to ascertain the perception of the clients who are the users of the valuation reports concerning the quality of valuations reports emanating from Nigerian Valuers. The survey was carried out with a view to addressing such issues regarding the quality of valuation reports with the intention of ascertaining the level of the clients satisfaction with the quality of valuations reports being given them by their professional valuers and to further identify the strengths/ weaknesses of the reports and make necessary suggestions for improvement if the views of clients suggest so. To achieve the objective of the study twenty four commercial banks and fifty property companies randomly selected were sampled in Lagos metropolis. Data collected were analyzed using descriptive statistical tools. The study revealed serious concern regarding the quality of valuation reports in Nigeria and necessary recommendations for addressing the identified problems were preferred

Empirical Verification of the Accuracy of Valuation Estimates Emanating from Nigerian Valuers: A Case Study of Lagos Metropolis

reliable and accurate manner. This study sought to examine with a view to validating or dispensing the criticisms as to whether Nigerian valuers are capable of undertaking investment valuations in a reliable and accurate manner or not. To achieve this aim, the paper employed quasi-experimental survey methods. Forty five (45) estate surveying and valuation firms were sampled in Lagos Metropolis, the study area. The study used both descriptive and inferential statistics. The study revealed a wide variance of valuation estimates from the sale prices of the twelve properties sampled which indicated that the valuation estimates are not accurate and reliable. The study concluded that the Nigerian Institution of Estate Surveyors and Valuers and Estate Surveyors and Valuation Registration Board of Nigeria (the two bodies responsible for the regulation of the valuation profession in the country) should take up the responsibility of ensuring that variance in valuation is minimised by way of providing databank in order to provide more meaningful valuation advice

The Accuracy of Nigerian Property Valuations Revisited

There have been increasing criticisms of the ability of Nigerian valuers to undertake investment valuations in a reliable and consistent manner. Prior empirical studies that have tended to investigate this claim have however been criticized as the valuers employed in simulated valuations of recently sold properties were not paid and did not inspect the properties. This study sought to examine whether valuers who carried out fully paid and fully inspected valuation assignments were able to do so in a reliable and consistent manner. To achieve this aim, the paper employed secondary data of the 131 Federal Government privatised properties which were valued by Estate surveyors and valuers before being sold. Data so obtained were analysed with the use of standard deviation and regression analysis. The results confirm that property valuations, even where they are fully paid for and fully inspected do not yet meet standards of reliability and consistency. The study concluded that there is the need for the valuation profession to enforce the maximum margin of error, enshrine maximum acceptable margin of error of +/-10.2% in the future Valuation Guidance Notes, promote the use of valuation standards and ensure more rigorous training of valuers with a view to minimising the incidences of unreliability and inconsistency of investment valuation in the country

A Critique of Real Estate Agency in Nigeria: Policy, Pedagogy and Practice

Real estate agency in Nigeria is confronted with various challenges that border on ethics and conduct in practice. This study assessed this situation by undertaking a tripartite review of the policy framework, pedagogy and practice of real estate agency. The position of policy on the practice of real estate agency was examined alongside pedagogic approach to training and issues of ethics in the practice. Questionnaires were used for data collection while relevant policy documents and extant literatures were also reviewed. Respondent groups include the thirty-five final year students of the Department of Estate Management Covenant University as well as the principal officers of fifty-two practicing Estate Firms in Ikeja, Lagos State, Nigeria. Data were analysed with 5-Point Likert scale and mean score and subsequently ranked while Paired Sample T-Test was used to compare and establish if there is significant difference between the opinions of the study groups about the adequacy of real estate agency training in tertiary institutions. It was found among others that the pedagogic approach was inadequate in terms of period of delivery. It was also found that agency was not properly grafted into real estate profession while issues relating to ethics, misconduct and conflicts are rife among practitioners. In addition, it was found that institutions’ intervention mechanism in ethics and misconduct among practicing surveyors is weak and ineffective. The study therefore suggests improvement in pedagogic approach, amendment of existing policy to re-define and enshrine real estate agency in real estate profession thereby making it exclusive preserve of qualified practitioners. It also recommends empowering institutions’ intervention mechanisms for a more effective monitoring

A Preview of Non-Client Influence in Property Valuation in Nigeria

The existence of clients’ influence on values reported by Estate Surveyors and Valuers has been confirmed particularly in the US, UK, New Zealand, Asia and Nigeria. In a bid to discover ways of impeding the continuance of such influence, this work aimed at ascertaining the role non-client standing as third parties to contracting of valuation jobs will play. The research entailed the study of 162 Estate Surveying firms in Lagos Metropolis. A simulated mortgage valuation was carried out by the researchers with 24 final year students in a valuation course. The students who were placed in groups were required to influence Estate Surveyors and Valuers to tilt the calculated value upwards. Result derived from the use of 95% confidence interval on the t distribution table reveals that Estate Surveyors and Valuers were influenced upwards to an average of about 16% of the actual force sale value. From findings it is evident that influence in valuation might not necessary be due to inherent stakes attached to the task. While a lasting solution to the scourge is being sought, the researchers call for its eradication so as to safe guards the integrity of the Estate Surveyor and Valuer