Adoption of Automated Valuation Models in Malawi; Valuers' Perception

Abstract

Valuation profession is historically known for being more traditional and extensively uses traditional methods of valuation. Despite this, in the recent past, there have been strides to incorporate automated valuation methods (AVMs) in the valuation profession especially for rating, mortgages and revaluation purposes. This new approach, however, attracted controversy when it was piloted in one of the cities in Malawi. This study sought to explore property valuers’ perceptions on the adoption of AVM in rating valuation against the use of traditional methods of valuation. The researchers used a descriptive study design with qualitative data collection and analysis methods. Semi-structured interview guides were used to collect data on valuers' perceptions on AVM. A total of 20 in-depth interviews were conducted with professional valuers. The valuers were asked how they perceive AVM approach to rating valuation compared to the use of traditional methods of valuation in terms of its accuracy, reliability and easiness. Data was manually analysed using content analysis. The general perception of the valuers towards AVM was mixed. One school of thought gave AVM the benefit of doubt for future incorporation into the profession if modified to suit the local environment. On the other hand, AVM was considered as posing threat to the valuation profession since anyone may be deemed qualified to carry out property valuation. However, the valuers are of the perception that the models will never replace traditional methods of valuation, hence suggestions to incorporate AVM as a supplement to traditional methods of valuation so that the former is used as a verification and auditing tool for the latter.