An examination of the valuation process in a low transparent property market – perspectives of property valuers in Nigeria

Purpose: The finance sector and property market challenges in some global regions have been linked to inefficient property valuation practices. As a result, global valuation professional organisations have set up standards and norms to promote efficient and transparent operations in the property valuation industry. Despite these concerns, valuation industries in some countries still face challenges that threaten their smooth operations. One of such is Nigeria, which faces various problems attributable to its valuation process and regulatory system. Consequently, this paper aims to examine the valuation process in Nigeria with a bid to identify the weaknesses in its valuation process and how it contributes to problems identified in the literature. Design/methodology/approach: A qualitative research approach was adopted, and semi-structured interviews were conducted with 12 valuers across different segments of the valuation industry in Nigeria. The data were subjected to thematic analysis using Nvivo 12 software. Findings: Our findings indicate a fundamentally weak valuation system and regulatory system marked by an opaque engagement process, underpricing of valuation services, inefficient domestication of international valuation standards, poor implementation and monitoring system and concerns about the training and certifications to meet global norms. These identified weaknesses contribute to and fuel problems such as client influence and valuation inaccuracy, among others. Practical implications: The study has some implications for the valuation professional organisations in Nigeria. The valuation professional organisations should devise systems and enact standards that go beyond solely replicating the IVS and RICS Red Book to effective domestication to suit local norms. Given the inefficient implementation and monitoring system, the use of proptech that supplements legal instruments needs to be adopted. Furthermore, the regulations should be strengthened in line with the trends of sustainability, duty of care and use of data as advocated by the IVSC. This will promote trust in the system and allow global stakeholders to transact more confidently with the Nigerian industry, as the current set-up does not evoke sufficient confidence in the system to deliver excellent and transparent valuation assignments. Originality/value: This study provides perspective from an untransparent property market on the implications of a poor regulatory system and valuation process for valuers and stakeholders who may rely on valuations conducted in such an environment for decision-making. The findings from this study potentially provide input for the valuation professional organisation in Nigeria in identifying the gaps in their framework and current practices and providing some suggestions to promote improvements.