Real Property Valuation Approaches and its Accuracy in Hawassa City

Abstract

The value of real property value valuated by banks is debatable due to variation between their approach and current market value in detail cost to construct a property. In most cases, different stakeholders have a complaint about the value of the properties which are valued by banks in Hawassa city. Thus, the main objective and purpose of this research are to assess real property valuation methodologies and their accuracy used in banks in Hawassa City. Purposive random sampling is used for selecting respondents for structured questionnaires, interviews, and case studies. A total of thirty-nine bank valuators and six evaluated properties were used for the survey and case study respectively. The survey results and case study show that within the cost approach some results are lower from market value and others are higher than property value by the mean value of +/- 17%, which ranges from+/- 15% to +/- 20%.  From the problems deemed as a reason for valuation inaccuracy, political instability and the problem of peace are ranked first among others.