Revisiting the Interaction between the Nigerian Residential Property Market and the Macroeconomy

This paper empirically examines the macroeconomic factors that affect the rental rates and selling prices of office space. The data are in the form of quarterly time series which are used for the period of 1996: 1 to 2012: 4 period. In addition, quantitative methods in the form of Vector Error Correction Model (VECM) are also used in this study. The results showed that there is a long-term relationship between macroeconomic variables with the rental rate and selling prices of office space. IRF and FEVD showed that the rental rates and selling prices responded permanently to the shocks that occured on macroeconomic variables. Moreover, the rental rate is predominantly influenced by the rental rate followed by the service sector employment, the selling price, exchange rate, inflation, interest rates and economic growth. Conversely, the selling price is predominantly influenced by the rental rate followed by service sector employment, the exchange rate, economic growth, the selling price, infllation and interest rates. Investors and developers can use the results of this study as one of approaches of market analysis, especially for office market analysis.

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“…Rental rates reach stability in the period of 20. This study is consistent with the research conducted by Ojetunde (2013) .000…”

Section: Wwwccsenetorg/ijefsupporting

confidence: 93%

The Determinants of Rental Rates and Selling Prices of Office Spaces in Jakarta: A Macroeconometric Model Using VECM Approach

Simon¹,

Achsani²,

Manurung³

et al. 2015

IJEF

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“…In Nigeria, Elile et al (2019) suggested that the exchange rate has a significant positive correlation with the real estate market. Earlier on, Ojetunde (2013) submitted that the exchange rate has significant positive effects on residential property rents. Ojetunde also found that interest rate has a significant negative correlation with housing rents while an insignificant negative correlation was found between inflation rate and housing rents.…”

Section: Findings and Discussionmentioning

confidence: 99%

Housing construction costs and house rents fluctuations in an emerging property market: the case of Osogbo, Nigeria

Chiwuzie

Dabara

2021

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PurposeCost of construction of residential properties as well as its subsequent rent trends remain a major challenge to stakeholders in the property rental markets of emerging economies. This study examined the relationship between housing construction costs and house rents fluctuations in Osogbo, Nigeria, to provide information for informed investment decisions.Design/methodology/approachThe authors conducted a survey, where three sets of questionnaires were administered on building contractors; estate surveyors and valuers and private residential property owners. The data required comprise the estimated average construction costs and average market rents for two and three-bedroom bungalows in the study area from 2008 to 2018. These data were respectively sourced from all the 15 firms of building contractors and 25 firms of estate surveyors and valuers in Osogbo, Nigeria. Stratified random sampling was employed to select 180 property owners from three medium-density residential districts of Osogbo. Secondary data on macroeconomic variables were sourced from the Central Bank of Nigeria. Data collected were analysed using descriptive and inferential statistical tools.FindingsThe authors found a significant positive relationship (0.749) between construction costs and house rents trends; both variables maintained ascending trends. Construction costs and house rents inflation rates exhibited random fluctuations with the former having a higher mean inflation rate (10.47%). However, the difference was not statistically significant (p-value = 0.317 > 0.05). Respondents identified consumer price index (CPI) inflation among other macroeconomic variables as the strongest predictor of both construction costs and house rents fluctuations. However, evidence from further analysis of the time series suggested otherwise.Practical implicationsThe result confirms construction cost as one of the vital supply factors of the housing market, which is often pass through to house rents. The positive relationship between construction costs and house rents trends should trigger new development which, will, in turn, allow rental housing investments to expand into new areas with prospects for profits that could be earned by domestic and foreign investors.Originality/valueThis study to the best knowledge of the researchers is the first to relate housing construction cost to house rent in Osogbo, Nigeria; thereby adding to the body of knowledge in this field.

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“…From the Nigerian perspective, Nuhu (2007) found that property development engenders increased wages for both skilled and unskilled labour engaged therein; and with corresponding multiplier effects of savings in rent, better productivity and increase in disposable income. Similarly, it has been observed that there is a correlation between gross domestic product (GDP) of a nation and the level of property development activities (Ball, 2002;Geltner et al, 2007;Ojetunde, 2013). Furthermore, the learning outcome for EST313/EST323 and their co-requisites is to build the capacity of students to become competent property development consultants, competent entrepreneurs in the real estate-and allied industry, job creators, and providers of housing and infrastructure that would help meet the needs of the government, firms and households.…”

Section: Learning Outcomesmentioning

confidence: 98%

Multi-temporal analysis of regression diagnostics for students' performance in property development and co-requisite courses

2017

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Property development and other co-requisite courses have been embedded within academic programs in Estate Management. Among the objectives of this study include identifying the co-requisite courses that accounted for a variation in students' academic performance in property development, and to examine the characteristics of the diagnostics of ordinary least square (OLS) regression model for this relationship over time. Data for this study comprised 2007/2008 to 2014/2015 (8-year) scores for the 1st- and 2nd semester property development and its co-requisite courses in the Department of Estate Management of the Federal Polytechnic Idah, Nigeria. Tools of analysis comprised descriptive statistics (mean score, standard deviation, and coefficient of variation), fitted trend equations, multiple linear regression analysis, and a multi-temporal visualization of the regression diagnostics comprising *ZRESID vs. *ZPRED, normality tests for residuals, and the Durbin-Watson test. The variation in the scores for property development courses during the 8-year period was attributed to specific 1st- and 2nd semester co-requisite courses. EST311 (Valuation I) was found to be the most consistent regressor for EST313 (Property Development I) in the 1st semester, while EST325 (Estate Accounting), was the most consistent regressor for EST323 (Property Development II) in the 2nd semester. Multi-temporal diagnostics analyses did not provide any sufficient evidence to invalidate the OLS regression models for the 1st- and 2nd semester Property Development courses and their co-requisites. Stakeholders' commitment to the teaching and learning of the co-requisite courses was recommended as triggers for a sustained pass rate in the property development courses.

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Revisiting the Interaction between the Nigerian Residential Property Market and the Macroeconomy

Cited by 11 publications

References 31 publications

The Determinants of Rental Rates and Selling Prices of Office Spaces in Jakarta: A Macroeconometric Model Using VECM Approach

The Determinants of Rental Rates and Selling Prices of Office Spaces in Jakarta: A Macroeconometric Model Using VECM Approach

Housing construction costs and house rents fluctuations in an emerging property market: the case of Osogbo, Nigeria

Multi-temporal analysis of regression diagnostics for students' performance in property development and co-requisite courses

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