How Property Valuation Works in Nigeria

Property valuation in Nigeria is conducted by registered Estate Surveyors and Valuers using one or more of three core methods, the comparative method, the income (investment) method, or the cost (depreciated replacement) method, depending on the property type and the purpose of the valuation.

Who Is Legally Permitted to Value Property in Nigeria?

Under Nigerian law, only Estate Surveyors and Valuers registered with the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON) are permitted to issue formal property valuation reports for official purposes, including bank loan applications, financial reporting, litigation, and probate. Membership in the Nigerian Institution of Estate Surveyors and Valuers (NIESV) is the professional body most registered valuers also belong to. A valuation from an unregistered individual carries no legal standing and should not be relied upon for any formal transaction.

The Three Core Valuation Methods

1. Comparative Method

Used most often for residential property. The valuer compares the subject property against recent sales of similar properties in the same location, adjusting for differences in size, condition, and specific features. This method depends heavily on the availability of reliable, recent transaction data.

2. Income (Investment) Method

Used for income-generating property such as rental apartments, office buildings, or shopping complexes. The valuer capitalises the property's net rental income at an appropriate yield to arrive at a capital value. This method is standard for institutional and commercial real estate valuation.

3. Cost (Depreciated Replacement Cost) Method

Used where there is little comparable sales or income data, for example, specialised buildings such as factories, schools, or places of worship. The valuer estimates the cost of replacing the building new, then deducts depreciation for age and condition, and adds the land value separately.

What Determines a Property's Assessed Value

• Location, proximity to commercial centres, security of the neighbourhood, and infrastructure quality (roads, drainage, power supply reliability).
• Title quality, whether the property has a Certificate of Occupancy (C of O), Governor's Consent, or other clean, registrable title significantly affects value; encumbered or disputed titles are valued lower or excluded from formal valuation entirely.
• Size and specification, built-up area, plot size, number of rooms, and quality of finishes.
• Condition and age, physical state of the structure and any deferred maintenance.
• Market conditions at the valuation date, valuations reflect value at a specific point in time and can shift materially with market conditions.

When Valuations Follow International Standards

For valuations tied to financial reporting (audited accounts, IFRS compliance) or international lending, valuers typically apply IFRS 13 (Fair Value Measurement) and IAS 36 (Impairment of Assets) standards alongside Nigerian practice, so the valuation holds up to scrutiny from both local regulators and international auditors or lenders.

Frequently Asked Questions