INVESTMENT PROPERTY TYPOLOGY ANALYSIS; EVIDENCE FROM NIGERIAN URBAN PROPERTY RETURNS AND MACROECONOMIC VARIABLES
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Date
2021-04
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Publisher
African Journal of Built Environment Research (AJOBER)
Abstract
The study examined the return characteristics of investment-properties on typology
basis in Abuja, Nigeria and quantified the impact of macroeconomic-variables on the
return. Quantitative primary and secondary data were gathered for the study.
Structured questionnaire was administered on 420 investment-properties available in
the portfolios of practicing Estate Surveying Firms (ESFs) in the study area. Both
descriptive and inferential statistics were adopted for data analyses with mean, growth
rate, standard deviation, correlation and regression coefficients. The result showed a
constant yield range for the study area, but variations in the return, risk and return/risk
among the property-types and a mixture of negative and positive relationships
between/among the property-types. The result further showed that returns on most
property-types do not correspond with their risks and detached house with boy’s quarter
exhibits an out-performance over all other property-types. However, in relation to the
economy, property-return exhibits a strong negative relationship with the currency
exchange rate and a weak negative relationship with interest rate, but none of the
macroeconomic variables statistically explain or drive return on the property. This study
contributed to the literature on Nigeria property-investment analysis by providing
guiding information for a better knowledge of the Abuja property market dynamics that
can enhance decision making of investors towards an improved market rewards
analysis. Despite the observed variations in the return characteristics in the study area,
an appropriate mix of property-types can still bring about improved performance benefit
to the investors. The study is beneficial to investors through reduction in the wide gap
between investment expectation and actualization through appropriate and specific
investment prescriptions. The notable variation between the yield and return on
property suggests that investors cannot rely solely on the yield of an investment analysis
as their investment guide, rather they should extend to the reward characteristics. This
is one of the few studies on Abuja direct property market reward analysis on propertytype approach that explored the sensitivity of property return to the Nigeria economy.
Description
Keywords
Investment-property, Macroeconomic-variables, Property-return, Risk-return, Typology