Residential Rental Market in Ghana – Empirical Examination of Submarket Existence

Abstract

Purpose-Rent (or rental value) can be defined as a periodic amount that is paid (by a tenant) or received (by a landlord or his assigns) for the occupation and or use of property. Residential rental values (RRVs) vary among rental markets; thus correctly identifying the drivers of these values underscores the need to understand how the market functions. The purpose of this research is to testfor submarket existence based on empirical examination of the residential rental housing market in Ghana. Approach-Based on literature review and market observations, we provide key concepts and an overview of the residential rental market in Ghana.Although there is a general consensus that submarket exists, empirical identification of same has employed varied methods. Based on real estate experts and stakeholder consultations, a priori delineations of submarket constructs are made based on spatial, structural and a nested approach. The existence of submarkets are tested usingthe Kruskal-Wallis H test and Hedonic modelling techniques. Findings-By using fieldwork data from Accra rental market, the analysis provides credence to the conceptualisation of submarkets and how to empirically test for same. It is argued that researchers should employ alternative methods to compare results in order to make far reaching conclusions. Research implicationsexamining the hypothesis that differential rental values exists for submarkets has implications for policy decisions to target submarket constructs differently to improve market maturity. Practical implicationsthe research provides stakeholder investors in the rental space an understanding of market dynamics for profit maximisation, and _______________________________________________________ 235 The 18 th AFRES ANNUAL CONFERENCE 2018 end-users to maximise utility in deciding where to liveand as such households could benefit from making informed investment decisions on housing. Originality / Value of work-This research is one of the first attempts to empirically identify submarkets in the residential rental market in Ghana.