INTEGRATED APPLICATION OF GIS AND HEDONIC PRICE MODELING (HPM) FOR PROPERTY VALUATION OF BUILT-UP AREAS IN MEKELLE CITY, TIGRAY, ETHIOPIA

Abstract

Property valuation plays a crucial role in asset building, environmental resource mobility, and for creation of digital society in the daily life. It significantly contributes to property administration, social equity, and economic stability, while impacts socio-economic, political, cultural, and environmental sustainability. Upon that, accurate and fair property valuation is essential. However, unlike developed countries, property valuation has under numerous challenges in our country. The objective of this study was to identify high property value variations in similar properties through analyzing of existing valuation system. Using a descriptive research design with mixed research data approaches, the study examines factors influenced property values using integrated modeling and mapping for validation and triangulation of the data in social survey. Simple random sampling has used for resident perceptions, while purposive sampling used for expert and official informants through interviews, questionnaires, and group discussions. Additionally, direct field observations conducted. The findings revealed that 99% of respondents are aware of property valuation, with 82% of residents, 33% brokers, and 84% of sectorial respondents involved in property transactions. Residents primarily used transaction 80% for residential houses and 61% for taxation and 20% for remaining listed valuation purposes. While 76% of sector respondents apply scientific valuation methods, only 24% (23% MHSC, 60% Banks, and 13% MMCA & RLRAIB) do so regularly. About 61%, cost approach is predominantly used, 13% income and 27% mixed approaches. For the approved building property nature appraised using 80% of cost approach, shows the valuation practices has not well built. Even through, the value variation in similar properties feedback looks like this 97% HMSC 89% brokers, 56% residents, 52% MMCA & RLRAIB and 26% banks. However, multiple cross validation of overall target group of respondents‟ averagely proven via FGD about 92% have well understood and agreed with the value variation. Economic impacts of value variations range from 36.5% in 1,000,000s to 27% in less than 1,000s, highlighting significant discrepancies. 85% of study results show high valuation and 76% have of these have from 10,000s‟to 1000, 000s‟ price difference roughly. Key informants indicated that the residents done with discrepancies of varied official and actual sales notification. Banks used manuals to prioritizing risk security first, while MMCA & RLRAIB focus on the regulatory system of valuation in higher hierarchy level. Residents‟ dissatisfaction stems from unfairness and lack of transparency. The aim of this study is to address these issues with located the building value using GIS and to model the characteristics property of attribute using HPM to conduct the accurate value with appropriate valuation practices. This have significant role to advance the existed system of property valuation in standardized and comprehensive approach.