THE INFLUENCE OF PROPERTY VALUATIONS ON REAL ESTATE INVESTMENT DECISIONS BY BUSINESSES IN UGANDA: A LITERATURE GAP
This paper describes findings of the review of literature on the influence of property valuations on real estate investment decisions by businesses in Uganda. Scoping review of accessible literature was the research approach that was applied to gather information for the paper. Results of the study revealed: lack of availability of market data; use of outdated property valuation data; external clients’ influence; unethical behaviour, negligence and professional misconduct of property valuers; lack of skills, poor education and training of property valuers; inadequate regulatory framework for the property valuation profession; and outdated property and land laws as main causes of inaccurate property valuations. Over and under-pricing of real estate, under and over-capitalization of real estate, inaccurate mortgage repayments, inaccurate property tax bills, under or over payment of building insurance premiums, wrong court decisions for real estate investments disputes, financial losses and bankruptcy, real estate market collapse and failure, and declining confidence in property valuers were identified as key consequences of inaccurate property valuations. Furthermore, the study identified: strengthening of property valuation curricula, registration of well qualified property valuers, improvement of regulatory framework for the property valuation profession, promoting accessibility of affordable new technology to improve accuracy of property valuations, reforms of outdated property and land laws, and encouragement of research to increase accuracy of property valuations as main interventions that can be implemented to improve accuracy of property valuations. Findings will support the development of a comprehensive property valuation model aimed at improving accuracy of property valuations in Uganda and elsewhere.
Inaccurate Property Valuations, Causes, Consequences, Interventions, Uganda