IMPACT OF ECONOMIC RECESSION ON RENTAL HOUSING PERFORMANCE IN SELECTED AREAS OF LAGOS METROPOLIS (2004-2013).
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Date
2016
Authors
Thontteh, E.O.
Nubi, T.G.
Journal Title
Journal ISSN
Volume Title
Publisher
Journal of Contemporary Issues in Real Estate.
Abstract
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.
Description
Scholarly article
Keywords
Economic recession , Lagos metropolis , Rental housing , Value , Research Subject Categories::SOCIAL SCIENCES
Citation
Thontteh, E.O. & T.G. Nubi. (2016) Impact of Economic Recession on Rental Housing Performance in selected Areas of Lagos Metropolis (2004-2013). Journal of Contemporary Issues in Real Estate. Volume 3 (1)