Environmental Attributes Consideration During Property Valuation in Tanzania: Professional Valuer’s Perspectives

Abstract

Context and background: With the advent of rising global initiatives to address climate change and sustainability, interest in addressing theoretical and practical alignment of how professional valuers consider environmental attributes has become the focus of much attention. Yet the overlap between consideration and non-consideration of environmental factors might significantly impact the value. Goal and objectives: This paper evaluates the perceptions of professional valuers on the consideration of environmental features during their valuation. Methodology: Data to inform the study was collected through questionnaires distributed to 89 randomly selected valuers registered with the VRB. The collected data were analyzed by using SPSS, and Cronbach’s alpha was used to determine the reliability of the questionnaire survey. The relative importance index was used to rank the importance of environmental factors, whereas the Chi-square test was used to examine existing practices in terms of prominent tools and methodologies used to incorporate environmental attributes into their valuation assignments. Results: The study reveals that, in Tanzania, there is a growing consciousness of the need to consider environmental attributes in practice though indicated that there is a challenge with how they consider these attributes using prominent valuation techniques in place. The study suggests that valuers and other stakeholders are eager to learn how to consider and integrate environmental features and contemporary valuation techniques to provide up-to-date estimates to support informed decision. The study recommends introducing Environmental, Social, and Governance (ESG) factors in terms of their theoretical foundation and practical implication on property valuation studies.

Keywords

• property valuation
• sustainability
• climate change
• hedonic pricing method
• professional valuers