Search results

The purpose of this paper is to re-examine the framework for determining property market maturity by including the economic characteristics of a country in the measure.

The examination was done in Lagos property market, which was stratified into Mainland and Island markets. A total of 181 estate surveying and valuation firms and 87 property development companies, as represented by top-level managers, participated in the survey. Data were collected on their perception of property market maturity attributes that included market openness, presence of professionals, level of transparency and state of the economy, among others. The data were analyzed using mean rating and mean deviation.

The result showed that “diversity of real estate products and forms” was ranked highly and had reached a mature stage in Lagos Mainland, Island and the aggregated Lagos market. Contrarily, the state of the economy was still at immature stage in Lagos and its sub-markets. Overall, the results showed that the Lagos property market was emerging and that the inclusion of economic features in the maturity framework reduced the level of maturity of the market when compared with previous studies.

The study implied that the assessment of the state of economy of a country, as part of the attributes for measuring property market maturity, will impact on the result and should be taken into consideration.

The study adds to the previous studies on property market maturity by assessing the impact of the economic characteristics of a country on the measure.

The purpose of this paper is to examine the of characteristics of Lagos, Nigeria property market and its submarkets on the prism of the market practitioners’ characteristics, market transaction structure and market maturity. This is done with a view to provide information capable of improving the flow of foreign real estate investment to the Lagos property market.

Primary data were sourced through questionnaire administered on firms of property practitioners in the market. A total of 190 firms were selected using the stratified random sampling technique based on their geographical location. Descriptive statistics and Mann−Whitney U Test were employed for data analysis.

The results showed that the Lagos property market was characterised by practitioners whose highest level of education was majorly first degree, and with a mean computer literacy ranking of 3.38 on a five-point Likert scale. Also, major transactions in the market included letting and sales. The market maturity index of the market was 2.95 and therefore adjudged as an emerging market. The analysis also revealed that there was no significant difference in the characteristics of the submarkets.

The results of the study are capable of enhancing investment decision in the market.

The study differentiates itself from and adds to the previous studies on market characteristics through an examination of the property market on the prism of the market transaction structure, market practitioners’ characteristics and maturity of the market holistically in the context of an African emerging market.

Challenges of property data in developing markets have been reported by several authors. However, a deep understanding of the actual nature of this phenomenon in developing markets is largely lacking as in-depth studies into the actual nature of data challenge in such markets are scarce in literature. Specifically, the available literature lacks clarity about the actual nature of data challenges that developing markets pose to valuers and how this affects valuation practice. This study provides this understanding with focus on the Lagos property market.

This study utilises a qualitative research approach. A total of 24 valuers were selected using snowballing sampling technique, and in-depth semi-structured interviews were conducted. Data collected were analysed using thematic analysis with the aid of NVivo 12 software.

The study finds that the main data-related challenge in the Lagos property market is the lack of database of market property transactions and not the lack or absence of transaction data as it has been emphasised in previous studies. Other data-related challenges identified include weak property rights institution with attendant transaction costs, underhand dealings among professionals, undocumented charges, undisclosed information, scarcity of data relating to specialised assets and limited access to the subject property and required documents during valuation. Also, the study unbundles the factors responsible for these challenges and how they affect valuation practice.

The study has implication for practice in the sense that the deeper knowledge of data challenges could provide insight into strategy to tackle the challenges.

This study contributes to the body of knowledge by offering a fresh and in-depth perspective to the issue of data challenges in developing markets and how the peculiar nature of the real estate market affects the nature of data challenges. The qualitative approach adopted in this study allowed for a deep enquiry into the phenomenon and resulted into an extended insight into the peculiar nature of data challenges in a typical developing property market.

Studies on the maturity status of Sub-Saharan African property markets are scanty. The absence of such studies appear to have made African property markets – such as the Nigerian market – unattractive to foreign investors who require market information to assess the viability of proposed investments. The purpose of this paper is to explore the maturity status of selected city property markets in Southwestern Nigeria (i.e. markets in the capital cities of Lagos, Ibadan and Osogbo), with a view to providing information for enhanced property investment in Africa.

The study adopted and expanded on property market maturity paradigms suggested by Keogh and D’Arcy (1994), Akinbogun et al. (2014) and Jones Lang LaSalle (2014) to measure the maturity status of the property markets in the Nigerian cities. The study investigated the maturity of three markets in Nigeria by scoring the stated views of a range of stakeholders (estate surveyors and valuers, public land administrators and financiers represented by commercial banks) across a range of ten indicators. The responses were classified by means of a five-point classification scale which expanded on the initial four-point scale developed by Dugeri (2011).

The three property markets were found to exhibit varying maturity characteristics (with weighted mean scores of 3.07, 2.71 and 2.51, respectively), representing emerging and immature stages of evolution on the maturity path. These results suggest that there is a correlation between the tier of the market and the level of property market maturity.

The study concluded that first- and second-tier city property markets have emerged sufficiently to the point where they may safely attract foreign direct and indirect investment from courageous foreign investors. However, the state governments and real estate professional regulatory bodies in the second and third markets need to undertake substantial remodeling of market structures to make them attractive to international investors.

The value of the paper is in providing much needed information for enhanced property investment in Africa.

With a focus on Lagos property market, the purpose of this paper is to examine the factors that influence accessibility to data for valuation and investment analysis in Nigeria. This was with a view to improving accessibility to property data in the market, thereby enhancing investment appraisal practice.

Primary data utilized for the study were sourced through the use of questionnaire administered on property practitioners (referred to as estate surveying and valuation (ESV) firms) in Lagos property market. A total of 190 ESV firms were selected using stratified random sampling based on their geographical location. Relative significance index (RSI), frequency distribution and principal component analysis (PCA) were employed for data analysis.

A total of 19 factors were identified as affecting accessibility to data. Confidentiality attached to property data by practitioners was ranked as the most significant factor with RSI of 0.81. The next three factors were lack of cooperation within members of professional body (0.79), accuracy of data (0.76) and duty of care to client (0.75), while the least ranked factor was duplication of data set (0.63). All the 19 variables were further grouped into six principal factors using PCA, namely, economic, attitudinal, ethical, legal, administrative and technical factors; with each factor explaining the following variance, 16.75, 16.1, 13.64, 12.78, 10.51 and 7.95, respectively.

The paper’s results will enable stakeholders to address the challenges to data accessibility in Lagos property market and similar opaque markets elsewhere thereby enhancing property data accessibility and investment analysis.

The paper is an attempt to examine the factors affecting accessibility to data identified in different studies holistically together in a single study and from the perspective of an emerging property market like Nigeria.

This study evaluated the effect of macroeconomic factors on residential real estate (RE) investment returns in the cities of Abuja and Lagos, Nigeria, with a view to guiding RE investors and researchers.

A survey research design was employed using a questionnaire to collect RE transaction data from 2008 to 2022 from estate surveying and valuation firms in the study areas. Rental and capital value data collected were used to construct rental and capital value indices and total returns on investment. The macroeconomic data used were retrieved from the archives of the Central Bank of Nigeria (CBN). Granger causality (GC) and multiple regression models were adopted to evaluate the effect of selected macroeconomic variables on residential RE investment returns in the study areas.

The study found a progressive upward movement in rental and capital values of residential RE investment in the study areas within the study period. Total and risk-adjusted returns on investment were equally positive within the study period. Only the inflation rate, unemployment rate and real gross domestic product (GDP) per capita were found to be the major determinants of residential RE investment returns in the study areas within the study period.

The secrecy associated with property transaction information/data by RE practitioners in the study areas posed a challenge. Property transaction data were not adequately kept in a way for easier access and retrieval in many of the estate firms and agent offices. Consequently, there was a lack of data that spanned the study period in some of the sampled estate firms or agent offices. This data collection challenge was, however, overcome by the excess time spent retrieving the required data for this study to ensure that the findings appropriately answer the research questions.

Inflation and GDP per capita have been found to be significant factors that influence residential RE investment performance in the study areas. Therefore, investors should pay attention to these identified macroeconomic factors for residential RE investment in the study areas whilst making investment decisions in order to mitigate a possible loss of income or return. The government should formulate and implement economic policies that would address the current high unemployment and inflation rates in Nigeria at large.

This study has extended and further enriched the existing body of knowledge in the field of RE investment analysis in Nigeria. To the best of the authors' knowledge, this study is the first to adopt the Cornish Fisher value-at-risk and modified Sharpe ratio models to analyse risk and risk-adjusted returns on residential RE investment, respectively, in Nigeria. It has therefore redirected the focus of RE researchers and practitioners to a more objective approach to RE investment performance analysis in Nigeria.

Quantitative commentaries in the UK, Australia and other developed economies have generally suggested a high level of valuation accuracy. These important findings need to be developed in other parts of the world to facilitate cross‐border property business transactions which globalization promotes. In countries like Nigeria where the property market and valuation practice are just evolving, the one‐to‐one relationship between valuations and transaction prices observed in more developed economies may not necessarily hold. This paper aims to focus on these issues.

This paper reviews major empirical studies on valuation accuracy with particular reference to the methodology and statistical analyses employed, the results obtained and their limitations. The paper also includes the results of an empirical study on valuation accuracy involving 250 residential properties in metropolitan Lagos, Nigeria. The paper employs error metric and econometric statistical techniques.

The study reveals, among others, that residential property valuation in Lagos metropolis exhibits inaccuracy below industry's acceptable minimum standards.

The credibility problem engendered by inaccurate valuation has far reaching consequences on the relevance and future of the valuation profession in the study area. Greater collaboration between professionals and academia in research, information procurement and analysis, improvement in valuers' task environment, a well articulated and encompassing mandatory national valuation standards incorporating effective enforcement machinery are some of the suggested remedial measures.

The study draws attention to the potentially grave implications of this result on bank solvency and the attendant negative impact on various aspects of the economy.

Real estate property has been established as a composite good, and its value is determined by many variables. The heterogeneous nature of real estate property has made different stakeholders value these variables differently. Therefore, this study aims to identify and evaluate these sets of variables which influence residential property value in the Lagos metropolis property market, Nigeria, based on professional valuers’ perception.

A list of variables that influences property value was generated through literature review, and the list was used to design an online questionnaire that was administered to valuers practicing in the metropolis. The valuers were asked to rank these variables in order of significance. Their response was analysed to establish the mean score of each variable that depicts their level of significance.

In order of importance, property location, neighbourhood characteristics, property state of repair, size of property, availability of neighbourhood security and age of property are the most highly significant variables that are influential on the property value in the Lagos metropolis.

The findings of this study will inform all existing and prospective real estate stakeholders, including facility managers of the major determinants of the value of their investments and, at the same time, will be a tool for valuers and researchers in property value modelling.

This study is the first attempt to develop a framework of property value determinants in this research area in Nigeria.

The pricing of professional service has been identified as one of the factors influencing the quality of service and willingness of clients to pay. However, the issue of service pricing is hardly seen as an object of discourse in real estate literature, especially among valuation studies, as it is obtainable in other fields. In Nigeria, it has become the practice for some sets of clients, especially financial institutions, to fix valuers’ remuneration based on the fact that these clients have market advantage. This practice and some other issues around pricing of valuers’ services have been going on for some years with little or no research insights from academics. The purpose of this paper is to examine the pricing system of valuation services within the Lagos property market with the aim of providing information to better valuation practice.

This study assumes an interpretive paradigm and adopts a qualitative research approach. In-depth semi-structured interviews were conducted with 24 registered valuers practising within the Lagos property market. Snowballing sampling technique was employed in selecting the registered valuers who were active in the practice of valuation in the study area. Data collected were analysed using thematic analysis with the aid of NVivo 12 software.

This study finds that the pricing system for valuation services in the study area can be broadly categorised under “negotiation” and “fixed rate” systems while the use of the “professional scale of charges” is more or less non-existent. The study also reveals various forms by which these systems are practised, and issues associated with them as well as the effects they have on valuation practice. The study further reveals the factors responsible for the continuous striving of the present pricing system which includes valuers’ inability to enforce the professional scale, competition in the market, buyers’ market syndrome, the game of numbers and the banks’ strategy to protect their customers. The authors also found that the low pricing of valuation service poses challenges to valuation practice and encourages unprofessional conducts that affect the quality of valuation output. The study also provides, albeit limited, an evidence of the relationship between valuation fee and quality of valuation.

This study is limited to Lagos property market and only the practising valuers. Insights from other major cities and stakeholders in service pricing like clients and regulatory authority may produce more insightful results.

This study provides important insights into valuers’ experience in the area of service pricing and how this affects the delivery of professional services. It also serves as the research blueprint in giving research attention to the service pricing in property valuation practice.

This study sought to highlight the conceptual and empirical grounds precluding accuracy in property valuation thereby exposing the limitations of valuation as proxy for actual transaction price and as basis for performance measurement for property investment. As a way of gauging the current level of awareness on the subject of valuation accuracy among Nigerian valuers (estate surveyors/appraisers) and to ascertain their response to the worldwide phenomenon, the study also included an empirical investigation of the perception of principal stakeholders in Lagos, Nigeria.

For primary data, the study employed questionnaire survey based on cluster sampling technique; while secondary data were sourced from existing literature and results of previous empirical studies.

“True market value” is unattainable; while valuation rarely identifies its target – the transaction price as surrogate of the “true market value”. In Nigeria, considerable gap exists between expectations and realities in valuation accuracy.

While efforts devoted to improving the accuracy of property valuation are laudable, the study revealed the extent to which such improvement is feasible.

The study suggested measures that would help Nigerian valuers hone their skills for improved level of accuracy; while funds managers and other valuation end-users are cautioned against blind use of valuations as performance yardstick for property investments.