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Article
Publication date: 12 June 2019

Abel Olaleye and Beatrice Oyinloluwa Adebara

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.

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Practical implications

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.

Originality/value

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.

Details

Journal of Property Investment & Finance, vol. 37 no. 5
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 27 July 2018

Daramola Thompson Olapade, Timothy Oluwafemi Ayodele and Abel Olaleye

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…

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Practical implications

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

Originality/value

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.

Details

Journal of Property Investment & Finance, vol. 36 no. 5
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 18 June 2018

Chioma Oluwaseun Abere, Olusegun Adebayo Ogunba and Terzungwe Timothy Dugeri

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…

Abstract

Purpose

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.

Design/methodology/approach

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).

Findings

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.

Practical implications

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.

Originality/value

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

Details

Property Management, vol. 36 no. 3
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 14 August 2018

Daramola Thompson Olapade and Abel Olaleye

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…

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Practical implications

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.

Originality/value

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.

Details

Property Management, vol. 37 no. 1
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 28 June 2011

G.K. Babawale and C.A. Ajayi

Quantitative commentaries in the UK, Australia and other developed economies have generally suggested a high level of valuation accuracy. These important findings need to…

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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

Practical implications

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.

Originality/value

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.

Details

Property Management, vol. 29 no. 3
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 4 July 2016

Rotimi Boluwatife Abidoye and Albert P.C. Chan

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…

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Practical implications

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.

Originality/value

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

Details

Journal of Facilities Management, vol. 14 no. 3
Type: Research Article
ISSN: 1472-5967

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Article
Publication date: 30 October 2019

Sunday Olarinre Oladokun and Manya Mainza Mooya

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…

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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.

Originality/value

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.

Details

Property Management, vol. 38 no. 1
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 22 March 2011

G.K. Babawale and T. Nubi

The Lagos State land use charge (LUC) 2001 represents a radical and wholesome restructuring of the entire erstwhile land‐based tax system in the state, and the first of…

Abstract

Purpose

The Lagos State land use charge (LUC) 2001 represents a radical and wholesome restructuring of the entire erstwhile land‐based tax system in the state, and the first of its kind in Nigeria. The purpose of this paper is to examine how this maiden holistic intervention in property tax administration in Nigeria has fared in its first nine years.

Design/methodology/approach

Primary data were garnered from stakeholders through personal interviews and structured questionnaires, while secondary data include information from the enabling act and other‐related materials.

Findings

It was noted that the intervention failed to conform to best practice both in policy and administration. As a result, the reform has not ceased to generate controversies, has enjoyed limited acceptability, and achieved limited success.

Originality/value

Taking a cue from the experiences of countries that have demonstrated best practices in property tax reform, the paper proffers suggestions, covering both policy (e.g. extensive stakeholders' consultation) and administration (e.g. improved links between tax payment and provision of local services) that would help to sustain the reform intervention and make it sufficiently worthwhile.

Details

International Journal of Law and Management, vol. 53 no. 2
Type: Research Article
ISSN: 1754-243X

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Article
Publication date: 16 September 2013

Gabriel Babawale

This study sought to highlight the conceptual and empirical grounds precluding accuracy in property valuation thereby exposing the limitations of valuation as proxy for…

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Practical implications

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

Originality/value

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.

Details

African Journal of Economic and Management Studies, vol. 4 no. 3
Type: Research Article
ISSN: 2040-0705

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Article
Publication date: 9 July 2021

Ndubisi Onwuanyi and Abiodun Kolawole Oyetunji

This paper explores the relevance of inter-market research to improving knowledge in property markets. It focuses on Nigeria's emergent property market which JLL (2018…

Abstract

Purpose

This paper explores the relevance of inter-market research to improving knowledge in property markets. It focuses on Nigeria's emergent property market which JLL (2018) suggests is information challenged. Given the country's lack of property data management, it is posited that inter-market studies can help to improve information supply and market knowledge. Inter-market research in Nigeria is compared with the UK's established market where such research is a key information source.

Design/methodology/approach

An online database search was used to collate published intra-market and inter-market research on Nigeria's property market between 2009 and 2019. The inter-market research were thereafter examined as to volume and scope (geographical and thematic) and compared with the UK's.

Findings

Relative to the UK, the volume as well as scope (geographical and thematic) of inter-market research in Nigeria are respectively far lower and narrower, thereby producing less information overall. Only a few Nigerian studies provide insights of two or more local markets. There is little or no research on many important market issues and other urban markets in the system. This suggests that inter-market research is relatively undeveloped in Nigeria.

Research limitations/implications

The online search approach used to assemble extant research in the absence of a research repository may have resulted in the omission of some inter-market research undertaken between 2009 and 2019 if these were not published online.

Practical implications

The dearth of inter-market research in Nigeria suggests an inadequately researched market. This limits market information, market knowledge, suggests a low market competitiveness with implications for development in view of the role of property in the modern economy.

Originality/value

In view of the little attention given to inter-market research in Nigeria, this study draws attention to its potential for improving market knowledge by the production of information which has a wider market relevance.

Details

Property Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0263-7472

Keywords

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