Valuation Accuracy and Investment Decisions: Evidence From Commercial Properties in Abeokuta, Ogun State

Valuation accuracy has long been recognized as a cornerstone of real estate investment, shaping the perceptions and choices of investors, financial institutions, and policymakers alike. The accuracy of property valuation is particularly important in developing economies where real estate constitutes a significant proportion of national wealth but is often hindered by fragmented markets and inadequate data infrastructure (Ajayi, 2003; Bello Olusegun, 2013). The findings reveal that while the majority of valuations fell within the generally accepted tolerance range of ±10% (IVSC, 2017), a considerable proportion exceeded this benchmark, with some deviations above 20%. Such outcomes suggest systemic weaknesses in valuation practice in Abeokuta, ranging from inconsistent methodologies to poor access to reliable transaction data. Investors indicated that substantial discrepancies negatively influenced their confidence in the property market and sometimes redirected their investment choices toward alternative sectors such as equities and government bonds. This confirms prior assertions that valuation reliability is closely linked to market confidence and investment flows (Gallimore & Gray, 2002). The study concludes that valuation accuracy, though relatively robust in Abeokuta, is undermined by contextual challenges inherent in Nigerian property markets. By integrating theoretical insights from the Efficient Market Hypothesis (Fama, 1970) and Agency Theory (Jensen & Meckling, 1976), the research demonstrates how information asymmetry and conflicts of interest exacerbate valuation inconsistencies. Practically, the study underscores the urgent need for enhanced professional standards, technological adoption in valuation processes, and the establishment of a centralized property transaction database in Ogun State. As Ayedun and Omirin (2012) observed, “improving valuation accuracy is not merely a professional necessity but an economic imperative for building trust in Nigeria’s real estate markets” (p. 27). Ultimately, this study contributes to the broader discourse on valuation reliability in emerging economies by offering context-specific evidence from Abeokuta. It fills a research gap by spotlighting a fast-growing urban center outside the dominant Nigerian real estate hubs, thereby enriching both academic debates and professional practice in valuation and investment decision-making.