Don urges data banking, domesticated practice standards in real estate valuation
IN a renewed effort to put the real estate valuation practice on a stronger pedestal, a university teacher has advocated data banking, comprehensive and mandatory valuation standards and guidance notes.
Professor of Estate Management, Gabriel Babawale, who delivered an inaugural lecture at the University of Lagos on ‘ Valuation Accuracy: The Myth, Reality and Expectations,’ said despite the spate of reforms and continued professional development efforts put in place by the regulatory bodies in recent times, issues bordering on valuation opacity and inaccuracy have continued to raise unresolved methodological questions in current valuation practice.
Babawale suggested the promotion of larger multidisciplinary firms through merger, acquisition and takeover, as well as additional regulations and stringent codes of practice to deter clients’ pressure, encourage valuers’ independence and compliance with approved standards and ethics.
He said multi- disciplinary large firms are the global trend. “The era of globalisation, particularly underscores the need for larger firms that are better positioned to fund research, support standard libraries, promote specialised skills, fund staff training and acquisition of necessary technology, provide better access to information and intra- firm communication and take advantage of innovations and resources, especially in information technology for improved service delivery,” he added.
Babawale said there is need to make the standards more home- grown and locally relevant, adding that absence or failure to enforce standards breeds mediocrity, inconsistency, abuse, complacency and ineptitude in professional practice.
The don’s recommendations are expected to improve the quality and reliability of the valuation measuring instrument, improve the conduciveness of the measuring environment, as well as the expertise of the measurers. He stressed the importance of principal stakeholders, such as academia, regulatory bodies, practitioners and valuation end users in addressing and mitigating inaccuracy in real estate valuation, providing consistent, transparent and reliable valuations that meet contemporary global standards, as well as local market needs.
According to him, valuation is information- driven. “High- quality data is the life wire of accurate price forecasts in all markets. The better the information set available to valuers, the more accurate valuations will likely be. Due to poor information flow within the market, valuations are presently founded mainly on mere guesstimates.
“Valuation is an opinion the valuer wishes the endusers to believe and act upon. It, therefore, ought to be backed up with adequate and convincing explanatory data, verifiable and incontrovertible evidence,” he said.
He said data gathering, analysis and banking should be given top priority, while calling for increased synergy between the regulatory authorities, valuation firms, relevant government departments and academic community on regular collation, as well as analysis of property transactions, performance and disseminating the findings in yearly reports.
Babawale called on the state and federal governments to consider the creation of the office of ValuerGeneral, as government independent authority on property valuation matters, to tackle far- reaching consequences of inaccurate valuations on the economy.
He also stressed the need for greater collaboration between major stakeholders to address issues bordering on valuation accuracy. Babawale suggested a joint standards committee of the regulators of real estate valuation - Estate Surveyors Registration Board of Nigeria ( ESVARBON) and Nigerian Institution of Estate Surveyors and Valuers ( NIESV) and major valuation end users, such as Nigerian Institute of Bankers, Chartered Insurance Institute of Nigeria and capital market operators with responsibility for promoting standardisation and codification of different aspects of valuation, as being practised in other climes.