UNILAG don advocates codes’ harmonization, joint standards in real estate sector

Professor Gabriel Babawale of the Department of Estate Management, Faculty of Environmental Sciences, University of Lagos has advocated the establishment of joint standards committees of regulators of Real Estate valuation in Nigeria.

The Professor of Estate Management gave this recommendation while delivering the 19th Inaugural Lecture of the University in the 2021/2022 Academic Session recently.

Babawale, who delivered a lecture on ‘Valuation Accuracy: The Myth, Reality and Expectations,’ said despite the spate of reforms and continued professional development efforts put in place by the regulatory bodies in recent times, issues bordering on valuation opacity and inaccuracy have continued to raise unresolved methodological questions in current valuation practice.

Babawale suggested the promotion of larger multi-disciplinary firms through merger, acquisition and takeover, as well as additional regulations and stringent codes of practice to deter clients’ pressure, encourage valuers’ independence and compliance with approved standards and ethics.

He said there is need to make the standards more home-grown and locally relevant, adding that absence or failure to enforce standards breeds mediocrity, inconsistency, abuse, complacency and ineptitude in professional practice.

He stressed the importance of principal stakeholders, such as academia, regulatory bodies, practitioners and valuation end users in addressing and mitigating inaccuracy in real estate valuation, providing consistent, transparent and reliable valuations that meet contemporary global standards, as well as local market needs.

According to him, valuation is information-driven. “High-quality data is the life wire of accurate price forecasts in all markets. The better the information set available to valuers, the more accurate valuations will likely be. Due to poor information flow within the market, valuations are presently founded mainly on mere guesstimates.

He said data gathering, analysis and banking should be given top priority, while calling for increased synergy between the regulatory authorities, valuation firms, relevant government departments and academic community on regular collation, as well as analysis of property transactions, performance and disseminating the findings in yearly reports.

Babawale suggested a joint standards committee of the regulators of real estate valuation – Estate Surveyors Registration Board of Nigeria (ESVARBON) and Nigerian Institution of Estate Surveyors and Valuers (NIESV) and major valuation end users, such as Nigerian Institute of Bankers, Chartered Insurance Institute of Nigeria and capital market operators with responsibility for promoting standardisation and codification of different aspects of valuation, as being practiced in other climes.