Sources and reliability of property market information for property valuation practice in Ghana. Issue 4 (21st August 2017) - Baffour Awuah, Kwasi Gyau
Abstract : Purpose: Adequate reliable property market data are critical to the production of professional and ethical valuations as well as better real estate transaction decision-making. However, the availability of reliable property market information represents a major barrier to improving valuation practices in Ghana and it is regarded as a key challenge. The purpose of this paper is to investigate the sources and reliability of property market information for valuation practice in Ghana. The aim is to provide input into initiatives to address the availability of reliable property market data challenges. Design/methodology/approach: A mixed methods research approach is used. The study, thus, relies on a combination of a systematic identification and review of literature, a stakeholder workshop and a questionnaire survey of real estate valuers in Accra, Ghana's capital city to obtain requisite data to address the aim. Findings: The study identifies seven property market data sources used by valuers to obtain market data for valuation practice. These are: valuers own database; public institutions; professional colleagues; property owners; estate developers; estate agents; and the media. However, access to property market information for valuations is a challenge although valuers would like to use reliable market data for their valuations. This is due to incomplete and scattered nature of data often borne out of administrative lapses; non-disclosure of details of property transactions due to confidentiality arrangements and the quest to evade taxes; data integrity concerns; and lack of requisite training and experience especially for estate agents to collect and manage market data. Although professional colleagues is the most used market data source, valuers own databases, was regarded as the most reliable source compared to the media, which was considered as the least reliable source. Research limitations/implications: Findings from the study imply a need for the development of a systematic approach to property market data collection and management. This will require practitioners to demonstrate care, consciousness and a set of data collection skills suggesting a need for valuers and estate agents to undergo regular relevant training to develop and enhance their knowledge, skills and capabilities. The establishment of a property market databank to help in the provision of reliable market data along with a suitable market data collection template to ensure effective and efficient data collection are considered essential steps. Originality/value: The study makes a significant contribution to the extant knowledge by providing empirical evidence on the frequency of use and the reliability of the various sources of market data. It also provides useful insights for regulators such as the Ghana Institution of Surveyors (GhIS), the Royal Institution of Chartered Surveyors (RICS) and other stakeholders such as the Commonwealth Association of Surveying and Land Economy (CASLE) and the Government to improve the provision of reliable property market information towards developing valuation practice not only in Ghana, but across the Sub-Saharan Africa Region. Also, based on these findings, the study proposes a new property market data collection template and guidelines towards improving the collection of effective property market data. Upon refinement, these could aid valuation practitioners to collect reliable property market data to improve valuation practice.