Institutional investors in The Netherlands experience a large shift in market value after changing valuer on their portfolio valuations. Examples of differences up to -30% were reported during the period of decreasing values after the GFC.

We studied a set of over 22,000 individual valuations on a 6 year period (2008-2013) and found a significant effect of changing valuer for the office property market of nearly -9%. Partially this effect was caused by the nature of the valuation process (desk top versus full valuation) but most of the difference was due to the absence of knowledge of the previous valuation. Retail and residential properties did not exhibit a significant effect of the absence of knowledge. Furthermore when trying to explain the reason for this difference we found that surveyors performing a first time valuation used more recent comparable evidence to underpin their valuations than valuers performing a repeat valuation. Average age of the used comparable transactions in a first time valuation is 8.5 months where the average age of comparable evidence for repeat valuations appears to be nearly 10 months.

Anchoring to existing market evidence by repeat valuers seems to be at the heart of the problem. Changing valuer could lead to large differences in the market value of the properties under valuation but appears to be more in line with contemporary market evidence. Institutional investors should investigate the comparables used by valuers performing repeat valuations more thoroughly.