Buletin Ukur, Jld. 7, No.3, ms. 190-197, Disember 1996 ©Penerbitan Akademik Fakulti Kejuruteraan dan Sains Geoinformasi Objectivity In Valuation Techniques Ibrahim Sipan Rosdi Ab Rahman Fakulti Kejurtlteraan dan Sains Geoinformasi Universiti Teknologi Malaysia SkudaL Iohor Abstract The issue of valuation accuracy is important for real estate professionals. The of accuracy and the techniques of valuation for assessing it. has been the subject of recent academic research and debate. This paper focuses on two main areas related to the topic of objectivity in valuation techniques. Firstly, it examined part of the methodological problem in traditional method of valuation including subjective elements and suggestions to improve it by using quantitative techniques to valuation. Finally, the element of risk and uncertainties in traditional approach should he treated by incorporating risk analysis tool to the valuation techniques. It is concluded that the application of quantitative techniques and risk analysis tools in valuation techniques will lead to produce more objective valuation. 1,0 INTRODUCTION The suhject of valuation and the techniques used are integral in the discussion and debate within the property industry. This is inevitable especially after the profession came under scrutiny when public aired their disappointment with the valuations carried out. Amongst the topic heatedly discussed were the ways and means to improve the approaches in which valuation process is carried out. As a result, a number of researches have been carried oUl with emphasis to the methodology. The outcome which is very encouraging pushes for a more scientific or technical approach and the objectivity in valuation is established as the way to carry out valuation exercises. For the purpose of this discussion, we will use the definition compiled by Hamid (1996) which reads as follows: "objectivity is defined as the means 10 interpret the market without personal bias, value, emotion and, poor assumptions, and to support estimates of value by putting more logic and evidence into valuation, taking in/o account various considera/ions. These considerations include how the many and varied characteristics of property affect value, and how changes in social, economic. and political factors are likely to influence value. These considerations are then incorporated into modeling tasks which encompass consideration a/value factors, utilization of sales evidence, measurement of variables, choice of functional forms, correlCJtion, and statistical inference." The paper will be of two parts; Part One being discussion on the valuation techniques incorporating statistical tools whist Part Two discussed the treatment of risk in valuation ... 2,0 QUANTITATIVE TECHNIQUES IN VALUATION Valuation is a process of estimating market value for a specific purpose of a particular interest in property, It takes into account all the features of property and also considers all the underlying economics factors of the market, including the range of alternative investments. Some valuers could describe the process as an art where skills are acquired through practice, dismissing suggestion of any scientific basis. Others seek support from a scientifically based statistical process. Most opinions extend over the wide range between 190