VALUATION VARIATION

Abstract

Transparency is highly regarded in the era of globalization. Professional property valuation should embrace both transparency and accuracy. It is often difficult to identify accuracy hi property valuation. Hence hi most instances, the "correct figure" lies within a permissible range of values that are deemed acceptable, commonly referred to as the "margin of error". Valuation report basically contains the full details and description of the subject property ending with a value "assigned" by the respective valuer. Derivation of the value and the assumptions made during the valuation process are buried upon the completion of the valuation assignment. This apparently obscures transparency that gives rise to many questionable doubts and uncertainty to the valuation. An experiment is conducted among local valuers to determine the degree of variation among individual valuers during the process of valuation on the same set of residential properties and the importance of each variable affecting property values. The degree of variation observed is compared to those carried out in other overseas research. They are found to be consistent and comparable. However, having regard to the consistency of variation at the landed residential property level which is more variable than that for condominium unit, it is recommended that further research into the possibility of implementing a common percentage adjustment on certain variables that affect values may be feasible.