Property valuation problems and market context – evidence from Kenya

Abstract

ABSTRACT Property valuation problems such as valuation inaccuracies/variations, client influence, and the use of heuristics persist despite efforts by professional bodies and researchers to improve the practice of valuation worldwide. While some studies attribute the above problems to limited information, most studies link these problems to valuer misconduct. Previous studies in developing countries mirror those of developed nations despite the different property market environments in the two nations; they place little emphasis on market-related problems. Further, there is limited evidence on why valuation problems persist in developing countries. The main objective of this study is to establish why valuation problems in Kenya persist despite efforts to minimise them. The study utilised a quantitative research design involving a survey and experiment of registered and practicing valuers in Kenya. Findings indicate that the above valuation problems persist because of the nature of the valuation environment in Kenya, characterised by limited information. This is typical of many other developing countries. The study makes a critical contribution to knowledge as it builds on the existing literature by providing additional empirical support on why valuation problems persist while introducing appropriate measures to address them.