Valuation accuracy in an emerging real estate market

This paper focuses on property valuation analysed from two perspectives. First, values determined by Government Valuers from the Land Valuation Division of the Lands Commission in Ghana are matched against those assessed by Private Sector Valuers for the same properties. Second, variations in these values (if any) are further analysed to identify sources of deviations; the basis of the recommendations for developing property valuation as a profession in the country. An important aspect of valuation is the availability and accessibility of credible property data. Unlike developed countries, emerging property markets in Africa and other emerging economies are opaque and characterized by thin market transactions. Lack of market transparency and the quality of available data tend to underpin wide variations in property values. In this paper, valuation-based data by both Government and Private Sector Valuers on 2,632 properties affected by urban road projects in Accra, the capital of Ghana have been analysed to primarily demonstrate the level of valuation accuracy. Preliminary results suggest the valuation profession and property market are increasingly developing. Values assessed by Government Valuers and Private Sector Valuers are highly correlated at 93% to demonstrate a high level of accuracy. Significant indicators are therefore provided to guide policy formulation for valuation practices and property market development in Ghana.