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A Critical Evaluation of Conventional Methods of Appraisal and its Materiality on the Growth Explicit Models of Valuation

January 6, 2022


The various ways of appraisal have been under scrutiny observation in recent times due to the fact that there have been unpredicted circumstances evolving in the country’s economy and the need to accommodate them is quite necessary. The conventional method of appraisal is gradually been overtaken by the growth explicit model. In view of this, this study evaluates the conventional method, vis-à-vis its relevancy on the growth explicit model. The study concluded that although both conventional and contemporary approaches use market comparisons in arriving at valuation estimates but variation in market situation and the confinement of information does not reduce the old model as much as it affects the conventional model. The study further made it known that contemporary valuations are good leverage to sort out the ambiguity and changes that are peculiar to modern leases unlike the conventional valuations they are not totally reliant on property market evidence and have access to other inputs from the capital market. In conclusion, contemporary valuations are able to embrace and perform in all circumstances surrounding market condition with the absence of adequate  adapt and operate in all market conditions in the absence of adequate comparable evidence.