Olusegun Adebayo Ogunba

The response of Nigerian valuers to increasing sophistication in investors' requirements

Purpose - The purpose of paper is to show how the changing property investment landscape in the past 40 years – for example the new requirements of valuation accuracy, rationality and the risk analysis, etc. – requires a corresponding response from property valuers (academia, professionals and regulatory institutions) in technique development. The issue has however not received sufficient examination in African real estate literature. This study aims to address the concern with a focus on Nigeria. Design/methodology/approach - The paper reasoned that the process of Nigerian technique development and assimilation into practice could be motivated through a study of issues that triggered off transition towards sophistication in the parent valuation profession in the UK. Accordingly, the paper worked out a seven-stage model of UK valuation transition in the past 40 years, and used this in diagnosing the level of progress achieved in the Nigerian valuation Industry in the areas of accuracy, rationality and risk analysis. Findings - The results showed that technique development of is presently largely restricted to the valuation academia, which has been making attempts to persuade practitioners and regulatory Institutions to higher sophistication. Generally, the paper diagnoses the Nigerian valuation profession as being in the second of the seven-stage process of movement towards investor-focused transition in the UK. Practical implications - The paper shows that the way forward for Nigerian evolution was seen to require a strong research base on the part of the regulatory Institutions which should result in the building of awareness, refinement of textbooks, empowerment of valuers and development of valuation standards that meet modern requirements of investor sophistication. Originality/value - This paper is the first to classify the development of investment technique within academia and practice in the UK for the purpose of identifying how far behind the developing markets are.

Effect of Principal Heuristics on Accuracy of Property Valuation in Nigeria

Valuation inaccuracy has been attributed amongst others to behavioural issues such as the usage of Anchoring and Adjustment Heuristics. There is however a dearth in the research of the other principal heuristics namely availability, representative and positivity. This research is hereby aimed at discovering the effects of these heuristics on the accuracy of property valuation. To accomplish this, the study undertook a cross-sectional questionnaire survey of 159 of the 270 Head Offices of Estate Surveying and Valuation firms in Lagos Metropolis, while 29 and 30 questionnaires were distributed to the Head Offices of the entire Estate Surveying and Valuation Firms in Abuja and Port Harcourt respectively. For ease of coverage, Lagos Metropolis was stratified into six zones; thereafter respondents were selected randomly. The respondents were required to carry out simulated valuations using each of the four types of heuristics and also with supplied current market data. The T-test at the 95 per cent confidence interval was employed to test for inaccuracy in heuristically determined values relative to the sale values (values of the ‘control’ properties). The result reveals that heuristic-determined values, particularly that of representative, are not as accurate as those derived from supplied current market data. The authors recommended more focus on research of representative heuristics while consistent usage of heuristics should be dissuaded, to prevent loss of clients’ confidence in valuation reports.