Surveying & Built Environment Vol. 22 Issue 1 (December 2012)

arely exist (Johnson et al., 2000,
p.18).
Other textbooks on principles of
valuation regard the Cost Approach as
‘a method of last resort’ or ‘a poor best’
(Scarrett, 2008, p.167). Consistent with
this philosophy, the training of valuers
entails studying all the other methods
of valuation, namely especially the
Surveying and Built Environment Vol 22, 37-60 Nov 2012 ISSN 1816-9554
Valuation Firm Approximate share of Cost
Method Valuation
KOA Consult, Accra 80%
Quaynor Consultancy Services, Tema 90%
A.K.Baffoe and Co, Kumasi 85%
Asenta Properties, Kumasi 90%
Valuation and Development Services, Accra 90%
Table 2: How frequently the leading valuation firms in Ghana use the Cost Method
Source: Interviews with surveyors who work or have worked in these firms
These results confirm the findings of
earlier studies (e.g., Obeng-Odoom and
Ameyaw, 2010; Obeng-Odoom and
Ameyaw, 2011). The Cost Approach
is used on a variety of occasions,
including when valuers are called upon
to value for sale, and insurance.
Note, however, that it is not in all cases
that the Cost Method is used. Three
exceptions are particularly noteworthy.
First, in valuation for rental purposes 6
the Market Approach is usually used.
In such cases, the asking price of a
property can be obtained from landlords
or the Rent Control Department.
Rental levels in Ghana are considered
high by most people, especially when
Market, Investment, Profit and Residual
approaches. However, in practice, the
Cost Method is the most widely used in
Ghana. The results of a discussion with
some valuers in the leading valuation
firms in Ghana reveals that, when
valuing residential, investment, and
industrial properties, they use the Cost
Approach most of the time (see Table 2).
juxtaposed with their incomes. The
rent in Accra could be around US$100
– US$1,000 per month, depending on
the type of house, location, building
finishes and the relationship between
the landlord and the tenant (Global
Property Guide, 2009). In some extreme
cases, in the so-called prime areas,
Richard Grant’s (2009) survey shows
that self-contained rental units were
priced between $1,400 and $2,500 per
month in 2005 or, as Mireku (2010)
notes, between $2,500 and $5,000 per
month more recently.
Farm valuation constitutes the second
exception. In such cases, it is the
Investment Method which is used,
6 Individuals seeking to rent single rooms do not usually obtain valuation opinions. However, institutions
(e.g., the Volta River Authority) which seek rental accommodation for their members of staff or office
space typically seek the opinion of valuers.
SBE
45