Examination of Factors Affecting the Reliability of the Use of Conventional Investment Method of Valuation in South-East, Nigeria

Abstract

Abstract

Due to the given increasing criticism that the value estimated from conventional investment method of property valuation practice in the country does not accurately predict market price, this study examined the ability of estate surveyors and valuers to estimate accurately the selling prices of residential properties in the south-east geopolitical zone of the country using conventional investment method and reasons for the unreliability, if any. The aim of this study is to identify factors responsible for non-reliability of the conventional investment method of property valuation, if proven unreliable. To achieve the objectives of the study, questionnaire backed up with interviews were administered on the population of ninety-eight (98) registered firms in Aba, Enugu, Onitsha, and Owerri towns. Data obtained were analyzed with the use of the relative importance indices (RII). From the analysis, the factors which may be responsible for unreliability of the convention investment method are; lack of standardized valuation inputs and problem of lack of up to date property data bank to assist valuers in determining valuation inputs. The challenges of the method in the study area are; lack of standardized approach to determination of valuation inputs and this affects the variability of results. The analyses also show problems of lack of standardized up-to-date property data bank to assist the valuers in determining the inputs to use for conventional investment method of valuation assignments. The study therefore recommends that the Nigerian institution of estate surveyors and valuer (NIESV) in collaboration with estate surveyors and valuers registration board of Nigeria (ESVARBON) should establish standardized mode of determining the conventional investment method of valuation inputs. The private entrepreneurs should be encouraged to undertake the establishment of computerized property data bank which should be globally accessible and regularly updated.

Keywords: Conventional investment method, reliability, examination of factors, south-east of Nigeria

Cite this Article

Udobi Alexander Nnamdi, Elekwachi Chikwendu Michael, Emodi Edmond Emeka. Examination of Factors Affecting the Reliability of the Use of Conventional Investment Method of Valuation in South-East, Nigeria. Research & Reviews: Journal of Crop Science and Technology.  2016; 5(2): 7–16p.