IMPACT OF ECONOMIC RECESSION ON RENTAL HOUSING PERFORMANCE IN SELECTED AREAS OF LAGOS METROPOLIS (2004-2013).
Purpose: This paper examined effect of recession on rental housing performance of prime properties in metropolitan Lagos. This is with a view to determining extent of the economic down turn on rental housing as well as interpretation of the trends in relation to economic recession. Methods of Analysis: The population considered for the study was practicing firms of The Nigerian Institution of Estate Surveyors and Valuers, Lagos State Branch consisting of 314 firms. A systematic random sampling technique was adopted in sample selection given a total of 62 firms which represent the sample size for the study location which covered Victoria Island, Ikoyi and Lekki areas of Lagos. Questionnaire was designed to source information on frequency of letting a property; vacancy ratio and factors influencing residential rental housing performance while mean variance and correlation was employed for further analysis. Findings: The information collated showed that rent decline occurred in Nigeria’s housing market in year 2010 up till third quarter of 2012. However, this picked up shortly thereafter in the 4th quarter of 2012 to 2nd quarter of year 2013 at an average rate of between 3% and 12.3%. In addition, twenty four (24) factors were tested to determine their level of influence on residential rental housing performance, location ranked 1st followed by flood risk, security of property rights, fear of attack, size of property and neighborhood which ranked 2nd to 6th respectively. A correlation test further showed that rental value in relation to recession is not the only determinant of rental housing performance as it explained only a proportion of it. This implies that there are other factors which affect rental housing performance aside economic recession. Study therefore recommends adequate monitoring of economic indices and quality infrastructure development to enhance performance of rental housing in the study location. Practical Implication of Findings: Through an in-depth review of the crisis in terms of the causes and consequences, this paper stresses that the impact of the crisis on rental housing is significant as recession could account for 17% - 88% influence on rental housing value in the selected study location. Moreover, a wavelike movement in terms of expansion, recession, contraction and the gradual on-going revival of the selected rental housing in the study location was also experienced. However, there are other factors influencing rental housing value performance such as locational attributes of the property which ranks first amongst other determinants. Originality/Value: This paper has filled a gap in literature by assessing the significance of recession on rental housing value performance in the selected study location. The study also affirms that recession is not the only determinant of rental housing performance as it explained only a proportion.