IMPACT OF RURAL-URBAN MIGRATION ON DEMAND FOR RESIDENTIAL PROPERTY

THE IMPACT OF RURAL URBAN MIGRATION ON DEMAND FOR RESIDENTIAL PROPERTY IN NIGERIA CITIES

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

Rural-urban migration was formerly regarded as favourable in economic development. Today, it has become one of the most embarrassing problems in the Nigerian development experience.

Rural-urban migration is ‘‘the phenomenon of a historically unprecedented movement of people from the rural countryside to the burgeoning cities of Africa, Asia and Latin America’’ (Todaro, 1997). ‘‘It is the movement of people from rural areas into cities’’ (Wikipedia, 2013). Some time ago, migration existed internally to enable excess labour to be taken slowly from the rural areas to provide workforce for industries in the urban areas and therefore aid industrial growth. However, experience in Nigeria has shown that the rate of rural-urban migration has ceaselessly outweighed the rate of job creation and having an overweight on the social and infrastructural amenities available in the urban areas which equally reflects on housing demand.

Housing is one of the best indicators of a person’s standard of living and his place in the society. Like food and clothing, housing ranks among the three (3) basic human needs. Its availability is very crucial to the welfare of every human. Housing, literally is defined as buildings or other shelters in which people live, a place to live, a dwelling and to Nations a critical component in social and economic fabric. To most groups housing means shelter but to others it means more as it serves as one of the best indicators of a person’s standard of living and his or her place in the society (Nubi, 2008). It is a priority for the attainment of living standard and it is important to both rural and urban areas. These attribute make demand for housing to know no bound as population growth and urbanization increase very rapidly and the gap between housing need and supply becomes widen.

According to Olofinji (2016), demand for residential property demand can be explained as the willingness and ability of housing consumer to pay for a particular dwelling, depending upon such consumer’s income, house type, location preferences and local prices.

In other words, demand for residential property at certain price refers to the value that is placed on a house linked with the satisfaction derived in such house.

Residential property demand in urban center is a manifestation and reflection of different household desires to live in an urban center. The desire of people to live in an urban center especially in Owerri is increasing at an alarming rate. Owerri for instance has a teeming population that exceeds the resources inherent, and the city may indeed witness a population explosion if urgent measures are not taken to curtail it.

It is against this introductory background of the study that the researcher has intended to examine the impact of rural urban migration on demand for residential properties in Nigeria cities with particular reference to Owerri Municipal of Imo State in Nigeria.

1.2   STATEMENT OF THE PROBLEM

At a glance to everyone who visits Owerri Municipal, it is not farfetched to notice the influx of rural population into the area which is evident in the over-crowdedness of Douglas road, Wetheral road, School road etc. This may not be far from the fact that these rural population are seeking for “better life”. In some other places like Oguamanam Street, Uche Street, Uche street extension, Lobo Street to mention but a few, as much as these areas are overcrowded, most people are found living in indecent building apartments due to their socio-economic background which cannot cope with an ever increasing price of decent houses.

Ever since Owerri became the state capital of Imo state, a lot of people have migrated and still migrate from the rural areas and even from some urban areas into it. They come in search of job opportunities, apprenticeship, trading, school etc. Due to this migration of people from different areas into Owerri Municipal, problems of accommodation started, overcrowding on social infrastructure also started which brought about ageing of the infrastructure, damages on the electrical fittings and plumbing fittings of houses, bad ground water due to excess waste that penetrates in the ground etc. Many people live in crowded areas which in turn affect the human health, living standard and the structural members of the city.

On the other hand, it may be the cause of traffic congestion, delayed services in banks, hospitals, and shopping centers. Low quality education in schools in Owerri municipal may also be an issue caused by rural-urban migration. It may have also been the reason for the over utilization of facilities yielding impacts such as  cracking of road, emergence of pot holes, wear-off on buildings etc.

Furthermore, observation has shown that government policies have been in favour of urban development, by purposely and continuously creating employment opportunities, educational opportunities and other infrastructural amenities more in the urban areas compared to the rural areas. Owerri Municipal is not an exemption to this fact. Currently, there exist about three (3) government owned Community Primary Schools clustered together within the boundaries of Tetlow Street and Royce Road whereas there are other surrounding communities which do not have up to two schools to support the entire community. It is noteworthy to also mention that some of the existing schools in these rural communities are not up to standard; therefore, people in search of better education may simply migrate from their rural communities into Owerri Municipal.

It may also be noticed that rural-urban migration have resulted to inequality in the development and quality of life between the rural and urban areas, and therefore may be an enhancing factor to rural-urban migration. People could be attracted to urban areas because they think they will have greater opportunities there.

It is a general notion that the rural areas in Nigeria are being affected by several incapacities in various levels of severity such as: inaccessibility, seclusion, under development, poverty, drabness, boredom, ignorance, depopulation, hunger, and all types of sicknesses. Migration from rural to urban areas may lead to reduction in the number of rural populace and on the other hand may result to high rate of demand on urban housing in cities to which they migrated to.

Therefore, there is need for studies that will focus on the reduction of residential property / housing demand in Owerri Municipal by discouraging rural-urban migration. Such studies will be important so as to create awareness on the present situation, improve understanding and proffer solutions to the issue. This research work is part of the endeavour to contribute towards filling this gap and thus focuses on the impact of rural-urban migration on demand for residential properties in Nigeria with references to  Owerri Municipal, Nigeria.

1.3   AIM AND OBJECTIVES THE STUDY

The aim of this study is to examine the impact of rural-urban migration on demand for residential properties in Nigeria – a case study of Owerri Municipal.

OBJECTIVES

Specifically the objectives of the study are;

1. To ascertain the causes of rural-urban migration and its impact on demand for residential properties in Owerri Municipal.
2. To determine the setbacks which rural-urban migration has on residential property demand in Owerri Municipal.
3. To suggest ways of discouraging rural-urban migration thus reducing its impact on housing demand in Owerri Municipal.

1.4   RESEARCH QUESTIONS

The following research questions are posed to guide the study.

1. What factors lead to rural-urban migration?
2. What are the impacts of rural-urban migration on the

demand for residential properties in Owerri Municipal?

• What mechanisms are to be adopted in solving the problem of rural-urban migration in other to reduce its impact on residential properties demand in Owerri Municipal?

1.5   RESEARCH HYPOTHESES

The hypothesis for this research work is as follows;

H₀: The rate of residential properties / housing demand in Owerri municipal is not dependent on rural-urban migration.

H₁: The rate of residential properties / housing demand in Owerri municipal is dependent on rural-urban migration.

1.6   SCOPE OF STUDY

The scope of this study is limited to rural-urban migration and its impact on residential properties demand in Nigeria, with the primary focus on Owerri Municipal in Imo State.

Furthermore, the research assessed the high rate of housing demand attributed to rural-urban migration which may be associated with various detrimental consequences that will be unfolded in the course of this research.

Hence, the study is limited to showing the adverse impact rural-urban migration has on the demand for housing in Owerri Municipal. Generally, the study looked at the problems, impacts, causes, and how they can be tackled.

1.7   SIGNIFICANCE OF THE STUDY

This work is expected to provide a proper understanding for the subject matter under study, thus it will be of immense help in tackling the problem of its practical perspective.

The study will supply the much needed background in tackling the impact of rural-urban migration on housing demand. Most of the developed countries today are great because they make use of research findings, which often originate from research works.

Therefore;

– The study when successfully completed will be of value to the educational planners and the government.

– The study will be of importance to researchers/students working on related topics.

– The study will reveal the reasons why people migrate from rural area to urban centers and the impact of such movement on housing demand in the study area.

– The study will also be an addition to previous works on the topic, thus, an addition to knowledge.

1.8   THE STUDY AREA

Owerri Municipal is a local government area of Imo state, Nigeria. Its headquarters are in the city of Owerri. Owerri Municipal council, formerly the headquarters of old Owerri local government area(comprising the present day Owerri Municipal, Owerri north, Owerri west and Ngor-Okpala local government areas) became a Municipal council on 15^th December 1996.

The council has an urban setting with one autonomous community made up of 5 indigenous kindred (Owerri nchiise) vis: Umuororonjo, Amawom, Umuonyeocha, Umuodu and Umuoyima, under the rulership of one permanent traditional ruler, presently he is the Eze of Owerre (a.k.a Ozuruigbo of Owerri). The apex traditional institution in the area is the “Oha Owerri” elder’s council, which is the area, is also the judicial aim of government (settling all dispute and other matters). “Onyeishi ala Owerri” is the traditional chief priest of the community. The entire women of “Owerri nchiise” are also under one umbrella body- the “Udodinindom Owerri”.

Generally, the five kindred of Owerri Municipal council are: Amawom, Umuodu, Umuonyeocha, Umuoronjo, Umuoyima. Owerri Municipal also covers the following areas: New Owerri, Ikenegbu, Aladimma, G.R.A and Work layout. Entrances into the Municipal council are Okigwe road, Onitsha road, Port-harcortroad, Aba road and Mbaise road.

1.8.1        LOCATION AND SITE

Owerri Municipal in Owerri, Imo state, Nigeria is located at approximately 5.4833N (Latitude in decimal degrees) and 7.03041E (longitude in decimal degrees). That is 5.4833N 7.035E coordinates: 5.485N 7.035E

Nigeria->Imo state->Owerri->Owerri Municipal Time zone: WAT (UTC+1) Owerri Municipal is bounded on the north by Amakohia, on the north east by Uratta, on the east by Egbu, on the east by Naze, on the south by Nekede and on the north east by Irete.

(a)    Rainfall

The study area is within the rain forest belt of Nigeria. Two distinct condition or season (ie wet and dry season) exists. These two regimes are derived from the different air masses prevailing over the country at different times of the year namely; the dry northeast air mass of Sahara origin (tropical continental air mass) which is responsible for the dry season. It blows across the Sahara desert towards Nigeria. This wind pushes the southeast wind further towards the coast where the tropical front is now formed. It is cold, dusty and dry; hence, it does not bring rain. Rather, it brings very cold, dusty, and dry weather called harmattan. It usually starts from November and ends around February and the humid tropical maritime air mass (south west trade wind) originating from the south atlantics. It blows from the high pressure belt area in the south in June to the low pressure belt in the north. This then pushes the tropical continental air mass towards the north where the inter-tropical front is formed. That is, the wind blows across the Atlantic oceans towards the coast of Nigeria. The wind is warm and wet; hence it brings rainfall to the study area. The rainfall decreases towards the northern part of Nigeria. It usually starts around March and ends around October with a short dry period in august called august break.

The rainfall pattern in the area is oscillatory, that is convectional rainfall occurs in area intensively heated like the study area. This results in heavy rain, accompanied by thunder and lightning. The area is characterised by heavy winds, lightning and thunder storm accompanied with heavy rain. The two peak periods are usually between June and September. The annual rainfall ranges from 1600-2900mm.

ANALYSIS OF FACTORS AFFECTING RESIDENTIAL PROPERTY DEVELOPMENT PATTERNS IN OSOGBO, OSUN STATE NIGERIA

ANALYSIS OF FACTORS AFFECTING RESIDENTIAL PROPERTY DEVELOPMENT PATTERNS IN OSOGBO, OSUN STATE NIGERIA

ABSTRACT

This study  set to analyze the factors affecting residential  property development pattern and in Osogbo, Osun State – Nigeria, to achieve this aim the researcher evaluate the patterns of property development, identify the various factors affecting property development pattern and rental value of properties and evaluate the effects of such factors on property investment in Osogbo metropolis. The research adopted survey designs which allow the gathering of relevant information using questionnaire, observations, and oral interviews of stakeholders. The data gathered were presented and analyzed using the descriptive statistics. The research reveals that property location, and infrastructural facilities have a very significant impact on residential property development patterns and rental value in the study area. Finally, it is recommended that the government harness development potential within the study area to create enabling environment for property development and urban infrastructures that will enhance property value in Osogbo, Osun State – Nigeria.

CHAPTER ONE

INTRODUCTION

1.0       BACKGROUND OF THE STUDY

Property, in the abstract, is what belongs to or with something, whether as an attribute or as a component of said thing. In the context of this article, it is one or more components (rather than attributes), whether physical or incorporeal, of a person’s estate; or so belonging to, as in being owned by; a person or jointly by  group of people or a legal entity like a corporation or even a society. Depending on the nature of the property, an owner of property has the right to consume, alter, share, redefine, rent, mortgage, pawn, sell, exchange, transfer, give away or destroy it, or to exclude others from doing these things, as well as to perhaps abandon it; whereas regardless of the nature of the property, the owner thereof has the right to properly use it (as a durable, mean or factor, or whatever), or at the very least exclusively keep it (Wikipedia, 2018).

Residential property refers to building that is developed for people to live or undeveloped land that is designated for residential use. Residential properties could be a consumption goods, or investment goods (Sratton,2008).As a consumption goods, it is acquired for owners occupation while as investment goods it is acquired for the purpose of deriving optimum return from outright sale or letting of the property. If this is the case, the price or rent of the residential property becomes very important to the seller and buyer or landlord and the tenant. Hence investment in this type of property is regarded as a considerable source of wealth for many investors.

Property development comprises a significant component of total Australian economic output. The property development process involves the continual combination of significant factors of production (land, labour, capital and enterprise). In addition, property development in Australia has been characterized by some significant cyclical influences as the process involves significant risk. It is in the interests of capital markets, market participants and the public sector that property development processes are better understood so as to ensure efficient allocation of physical resources, human resources and capital(Cadman, 1995).

The pattern of property development within the context of metropolitan growth and development has been the subject of an extensive literature. Among the streams of literature have been monocentric and polycentric models, rent gradients and population density, and spatial mismatch and jobs/housing balance. Less examined have been the factors that determine the specific location of residential development from among the number of potentially suitable sites available. Miles (2002) of opined that site selection suggest that factors that are important in locating a residential development include: physical suitability for development, slopes, soils, hydrology, land availability, legal restrictions, government regulations (zoning and other land use controls), existing land use patterns and location of other property development, access, including proximity to interstate highways, distance to employment sources, distance to shopping, availability of amenities (water, restaurants and shopping, golf, parks), neighborhood factors such as age of surrounding housing stock, schools, crime etc (McMillan, 2000).

The price or rent derivable from properties varies as different property command different rent and price (Oni, 2007). Rent and price are yardsticks for determining the value of a property. Since property with high value command high rent or price and properties with low value command lowrent or price vice versa. The value of residential properties are influenced by several factors among which are physical features of a building such as numbers of  room, facilities available, size, age, location factors for instance; proximity to work place, market, school, hospital etc, accessibility to various amenities and services, population density of the location of the property and availability of property title (Oni, 2007).Therefore, any investigation in to the nature and behavior of property price must recognize that property as a commodity is not a single goods but a complex bundle of services or potential services which operate in many dimension. (Oyebanji,2003). Nigeria has a large real estate market that has not attain its climax due to limited circulation of information on properties transaction as it relates to properties feature, their actual value and  impact on market value, organizations available properties and professional services available in various locations nationwide. These has made it necessary that as real estate developers market their properties they must recognize that in order to achieve success, reliable  information of properties market must be documented and made available to property merchant.

The value of access is capitalized into the land value and access is measured through market participants’ willingness to pay. Essentially, this view suggests that accessibility measures may be inferred from land prices. The relationship among accessibility, property values and land use patterns has been the pre-occupation of earliest theorists with indication that travel costs were traded off against property rents and population densities from Central Business District (CBD) to suburbs of a mono-centric city (Oni, 2009).

Quality of the environment is also another factor that affects the rental values of property. Property value does not only depend on the physical characteristics of a building but also the environment that surrounds the building. Developments of various transportation modes have become pivotal to physical and economic developments. Access to major roads provides relative advantages to residential users (Rosen, 2014).

The capital intensive nature of property development has resulted huge gap between demand and supply for properties especially residential properties due to the ever increasing population in many major cities in Nigeria of which Abuja is not an exception in view of this development. This study is carried out to analysis of the factors affecting residential property development pattern in Osogbo in order to provide guide to prospective real estate developers and tenants on residential property transaction.

1.1       STATEMENT OF PROBLEM

The capital expenditure in housing project, high property demand due to ever increasing population and limited supply of properties has made properties developers to source for funds from different financial institutions to engage in the provision of residential houses to meet the high demand. Due to the high demand and good returns on property investment, more investors are showing interest in properties but with little or no knowledge of the factors that determine the property development pattern and rental value and due to this, they have encountered problem in maximizing their returns. This has made it necessary to assist the property developers and landlords with information on factors that affect property development pattern and rental value to enable them make informed decision on property development project

1.3       AIM AND OBJECTIVES

The aim of the research work is analyse the factors affecting residential property development pattern in Osogbo, Osun State – Nigeria.

To achieve this aim, the listed objectives shall be pursued:

1. To evaluate the patterns of property development in the study area
2. To identify the various factors affectingproperty development pattern and rental value of properties in the study area
3. To evaluate the effects of such factors on property investment in the study area.

1.4       RESEARCH QUESTIONS

1. What are the patterns of property development in Osogbo?
2. What are the various factors affecting property development pattern andrental value of properties in the study area?
3. What are the effects of such factors on rental value of real estateinvestment in the study area?

1.5       SIGNIFICANCE OF THE STUDY

This study will contribute to the body of knowledge that is available in public document, literatures, book, magazines and journals. Also it will serve as a reference material for students, scholars and other researchers. In addition, it will help individuals, professionals, investors, communities, change agents, and the society at large on what to look out for when venturing in to property market. Also, this study will help researchers, scholars, and investors to identify various property development pattern and residential properties characteristic that have relatively strong impact on their rental values and to an extent influence the sales or purchase decisions of sellers and buyers in Nigeria.  

1.6        SCOPE AND LIMITATION OF THE STUDY

The scope of the study is limited to the analysis of the factors affecting residential property development pattern in Osogbo. The research is also limited toboth commercial and residential properties within the town.

Limitations

The researcher faced various problems when carrying out this field study. Some of these challenges included:

1. Some respondents were unwilling to fill the questionnaires since they were suspicious about the study. Many perceived it as sharing very vital information which they were not ready to furnish the researcher with.
2. Delays were experienced from the respondents who took very long to complete the questionnaires and constant postponement of the picking date proved to be very frustrating to the researcher.
3. At times some of the respondents did not fill in the questionnaires adequately and ignored certain sections that required the giving of opinions which made it difficult for the researcher to make adequate conclusions.

1.7       DEFINITION OF TERM

Property development: Property development, is a business process, encompassing activities that range from the renovation and re-lease of existing buildings to the purchase of raw land and the sale of developed land or parcels to others (Wikipedia, 2017).

Property: This is the embodiment of tangible ownership right or bundles of right in real estate. It could also be described as a concept of right which can be held separately (Babatunde, 2003).

Rental Value: This is the worth or value of property in an open market. It is also the value arising out of the lease or renting out of a property on a periodic basis usually yearly.

Residential Property: it is a building that is used or suitable for dwelling purpose. They are dwelling house such as bungalows, duplex, detached houses, semi-detached houses, etc. (LBTT 4010)

Value: This is the monetary worth of a thing. It is expressed as the value of a goods or services measured by the amount of other goods and services for which it will exchange. It is a determination or quality of an object, which involves any sort of appreciation or interests. Such appreciation involves feeling and ultimate desire or tendencies. Value is basically the worth of a thing (Olayonwa 2006).

Pattern:according to Collins English Dictionary defined  pattern as the repeated or regular way in which something happens or is done or  an arrangement of lines or shapes, especially a design in which the same shape is repeated at regular intervals over a surface.

1.8       THE HISTORICAL BACKGROUND OF THE STUDY AREA

The early history of Osogbo is essentially the legendary account of the spirit-world; it is the history of the early people whom we call the spirits and fairies. This is in line with Yoruba traditions, which use mythical stories to explain the origins of the ruling families of an early Yoruba state.

Osogbo according to Yoruba oral history had been founded as early as Oduduwa period. Oso-igbo, the goddess of Osun River, was the Queen and original founder of Osogbo. She was credited with many important achievements, which helped to establish the settlement.

Osogbo the capital of Osun lies on coordinates 7°46′ North 4°34′East with an area of 47kmsq. According to the 2006 Population and Housing Commission Census, the city has a population of 156,694 people. Osogbo shares boundary with Ikirun, Ilesa, Ede, Egbedore and Iragbiji and is easily accessible from any part of the state because of it’s central nature. It is about 48km from Ife, 32km from Ilesa, 46km from Iwo, 48km from Ikire and 46km from Ila-Orangun.

Osogbo is a commercial and industrial centre. This started in 1907, when the British Cotton Growing Association sited an industry for growing and ginning of cotton. The Nigerian Tobacco Company (NTC) built its first factory in Osogbo. In this same year, a major turning point for the city which helped in its industrial and commercial development occurred.  The railway tracks were constructed linking it to other parts of Northern Nigeria.  This attracted people from far and near.

The Ataoja of Osogbo is the traditional title of the King and he is the political and spiritual heads of Obas and Chiefs in Osogbo and Olorunda Local Government Areas.

Osogbo is famous for the annual Osun Osogbo Festival which attracts tourists from different part of the world.

ASSESSMENT OF THE IMPACT OF VACANCY AND OCCUPANCY RATE ON RESIDENTIAL PROPERTY INVESTMENT MARKET

ASSESSMENT OF THE IMPACT OF VACANCY AND OCCUPANCY RATE ON RESIDENTIAL PROPERTY INVESTMENT MARKET

CHAPTER ONE

1. Introduction

1.1       Background of the Study

A vacancy rate serves as an important indicator of the health of a real estate market. But we cannot draw sound inferences about a market just by observing the rate alone because many factors contribute to a vacancy rate. The same rate may tell different stories, and different rates may tell the same story. The vacancy rate is the percentage of all available units in a rental property, such as a hotel or apartment complex, that are vacant or unoccupied at a particular time. It is the opposite of the occupancy rate, which is the percentage of units in a rental property that are occupied. High vacancy rates indicate that a property is not renting well while low vacancy rates can point to strong rental sales.

The vacancy rate is calculated by taking the number of vacant units, multiplying that number by 100, and dividing that result by the total number of units. The vacancy rate and occupancy rate should add up to 100%.In real estate, the vacancy rate most often represents units that are vacant and ready to be rented, units that have been turned off upon the exit of a tenant, and units that are not currently rentable because they are in need of repairs or renovations. A property owner can use vacancy rates as a metric for analysis. Changes in the percentage of vacant units versus occupied units, the length of time occupied units are remaining active, or other rental conditions can provide guidance regarding how competitive a property owner has made the property. If a property owner is charging significantly more or less than the rest of the rental market, this may be reflected in the overall vacancy rates. It can also provide information regarding the effects of price changes or advertising on unit occupancy.

While vacancy rates are commonly used to assess an individual property’s performance, such as a hotel monitoring its nightly vacancy rate, aggregate vacancy rates are also used as economic indicators of a real estate market’s overall health. Many firms servicing the residential and commercial real estate space gauge the strength of the overall industry using metrics such as vacancy rates, rental rates and construction activity. According to the natural rate hypothesis, fluctuations in apartment rents are driven by deviations in the vacancy rate from equilibrium or “natural” levels. One reason to estimate natural vacancy rates is to confirm this hypothesis. Beyond that, however, estimates of the natural vacancy rate for a rental housing market provide information that is potentially useful for investors, lenders and other real estate professionals. Comparing the natural rate at a point in time to the actual vacancy rate provides some indication of future rent movements in that market. In addition to its effect on the movement of rents, the level of the vacancy rate has direct implications for the return on property investment. In long-run equilibrium, the lower the natural vacancy rate, the greater the amount of rent generated by a given rental property, everything else held constant. If the natural vacancy rate declines over time, the return on rental property investment will rise, ceterisparibus.

Housing markets are often modeled as a series of separate but related submarkets, with differing supply and demand conditions in each. In the case of a rental market, there may be separate submarkets for different apartment types (one-bedroom, two-bedroom, etc.), and for different geographic locations. If submarkets exist, it is possible that natural vacancy rates will vary by submarket. In that case, information on natural vacancy rates is made more useful if available at the submarket level.

Empirical support for the existence of a natural vacancy rate in rental housing dates back to Smith (1974). Since then, a number of studies have focused on variations in the natural rate across both space and time. For example, Gabriel and Nothaft (1988) provide evidence of substantial variation across major U.S. metropolitan areas. In a more recent paper, Gabriel and Nothaft (2001) find the duration and incidence of vacancies, and the natural vacancy rate, to vary across metropolitan areas with a number of factors including housing costs, heterogeneity of the housing stock, tenant mobility, and population growth. In an effort to decongest the population of Gwagwalada mini campus of the University of Abuja to enhance a conducive learning environment for its students, the university had relocated to its permanent site located at Ido Sariki, along airport road this have adversely affected the vacancy and occupancy rate in Gwagwalada while house rent in settlements around the permanent site of the university of Abuja has skyrocketed following the relocation of some departments of the university to that site. This has necessitated the need to carry out an assessment of the impact of vacancy and occupancy rate on residential property investment in the area.

1.2       Statement of the Problem

The rental vacancy rate is the fraction of rental properties not rented at a point in time. This captures pressures in the residential property investment market. It matters for understanding the balance between supply and demand, future pressures on rental prices and the typical duration of vacancy for a landlord’s budgeting purposes. The relationship between the vacancy rate and the housing production rate is expected to be negative as well. If the vacancy rate is high, the supply of residential property will be higher than the demand for residential property, which means that the property prices are stable or decreasing. Consequently, developers won’t have much stimulus to engage in residential property development and the housing production rate will be relatively low. This study seeks to assess the impact of vacancies and occupancy rate on residential property investment market in Gwagwalada, FCT Abuja.

1.3       Aim and Objectives of the Study

The aim of this project is assess the impact of vacancies and occupancy rates on residential property investment market in Gwagwalada FCT Abuja.

The specific objectives of this are as follows:

1. To ascertain the extent of vacancies rate of residential property in Gwagwalada
2. To evaluate the causes of vacancies of residential properties in the study area
3. To assess the impact of vacancies and occupancy rates on residential property investment market in the study area.

1.4       Research Questions

            The following research questions will serve as a guide to the researcher:

1. To what extent are vacancies rates of residential properties in Gwagwalada?
2. What are the causes of vacancy of properties in the study area
3. What are the impact of vacancies and occupancy rates to residential property investment market in the study area?

1.5       Significance of the Study

The findings of this research “Assessment of the impact of vacancy and occupancy rate on residential property investment market” will serve as a guide for investors to be able to make reliable investment decision that will ensure high return on investment.

The result of this study will serve as a guide to other researchers who are interested in further research into the impact of vacancy and occupancy rate on residential property investment market in Gwagwalada and Nigeria at large.

1.6       Scope and Limitation of the Study

The scope of this study covers only the assessment of the impact of vacancy and occupancy rate on residential property investment market in Gwagwalada, FCT Abuja. This further limited to old Kutunkun, Compensation layout.

Limitations

Some factors militated against the success of this work, though the researcher endeavoured to accommodate them. Thus, some of the constraints inherent in the course of carrying out the research include, among others, the peculiar nature of real property market. It is not like commercial markets where one can easily come face to face with both the buyers and sellers to get information he wants. In real property market, information is not easily circulated among Estate Surveyors. Vital information required by the researcher from some respondent Estate Surveyors were not collected due to pressure of work and other commitments facing them during the time the researcher required those information. The researcher also faces other challenges such as finance, time and the un-corporative nature of some respondents.

1.7       Operational Definition of Terms

Vacancy: Dictionary.com define vacancy as the state or condition of being vacant or unoccupied; emptiness.

Occupancy Rate: A measurement expressed as a percentage of the total amount of occupied space divided by the total amount of existing inventory. Occupied space is defined as space that is physically occupied by a tenant. It does not include leased space that is not currently occupied by a tenant.

Vacant Space: Vacant space is defined as space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not available.

Percent Leased Rate: A measurement expressed as a percentage of the total amount of leased space divided by the total amount of existing inventory. Leased space is defined as space that has a financial lease obligation. It includes all leased space, regardless of whether the space is currently occupied by a tenant. Leased space also includes space being offered for sublease.

Investment: An investment is an asset or item that is purchased with the hope that it will generate income or will appreciate in the future.

Real Estate: Real estate is the property, land, buildings, air rights above the land and underground rights below the land. The term real estate means real, or physical, property.

Property: In common law, real property (immovable property) is the combination of interests in land and improvements thereto, and personal property is interest in movable property. Real property rights are rights relating to the land.

Investor: An investor is a person that allocates capital with the expectation of a future financial return. Types of investments include: equity, debt securities, real estate, currency, commodity, token, derivatives such as put and call options, futures, forwards, etc.

Availability Rate: A measurement expressed as a percentage of the total amount of available space divided by the total amount of existing inventory. Available space is defined as the total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date, although it excludes space available in proposed buildings.

1.8       The Study Area

Before the creation of Federal Capital Territory, Gwagwalada was under the Kwali District of the former Abuja emirate now Suleja emirate. Gwagwalada Area Council was created on 15 October 1984. Its official population figure of 158,618 people at the 2006 census. The relocation of the seat of government from Lagos to Abuja in 1992 and the recent demolition of illegal structures within the Federal City Center brought a massive influx of people into the Area Council being one of the fastest growing urban centers in the FCT. The population of the Area Council has grown to over 1,000,000 people. Gwagwalada Area council is one of the five Local Government Area Councils of the Federal Capital Territory of Nigeria, together with Abaji, Kuje ,Bwari , and Kwali ; the FCT also includes the City of Abuja .Gwagwalada has an area of 1069.589 km 2.

AN ASSESSMENT OF THE IMPACT OF PROPERTY MAINTENANCE ON RESIDENTIAL PROPERTY IN NASARAWA

AN ASSESSMENT OF THE IMPACT OF PROPERTY MAINTENANCE ON RESIDENTIAL PROPERTY IN NASARAWA

ABSTRACT

A building fabric is referred to as an “environmental envelope” because it is the means by which the natural or external environment may be modified, to produce a satisfactory internal environment for man to live in. The deterioration of residential buildings hampers its ability to perform adequately, thus is important to ensure proper maintenance to prevent deterioration. This project therefore attempts to assess the impact of property maintenance on residential property in Nasarawa. Due to the neglect of the maintenance component of the housing process in the country, a lot of public and private residential buildings are in a state of disrepair.  In view of the above, this study was designed to assess the current condition of residential buildings, identify the underlying principal causes of poor maintenance of residential properties, analyses the maintenance policy and p ractice and capacity of the maintenance and make suggestions and recommendations towards the adoption of effective maintenance policy and innovations that would address the property maintenance problem in residential property.  The field investigations focused on residential buildings. The study also established the following factors as being responsible for the poor maintenance of residential buildings: The age of the buildings, Lack of maintenance culture, Inadequate funds and high maintenance cost, pressure on building facilities by number of users and poor construction work and maintenance work done by maintenance personnel of the institution. The study concludes by enumerating a number of recommendations aimed at providing the necessary framework for proper and effective maintenance of buildings. These among others are: the need for public institutions to embrace preventive maintenance practice as a high priority rather than adhoc maintenance.

CHAPTER ONE

1.0       INTRODUCTION

1.0       BACKGROUND TO THE STUDY

Provision of adequate, affordable and high standard and quality housing that meets the social, economic and political aspirations of the citizenry remains the primary and major focus of all governments the world over. This is because the fulfillment of this desirable social objective is a key component of sustainable development (Ibem and Amole, 2010) and a measure of the well being of the people. According to Leong (2009), housing is a major factor impacting on the health, safety, socio-economic and political life of the occupants. In fact it impacts all aspect of human endeavour. Thus, the state of housing and its environment is an indicator of the level of development and condition and state of the citizenry.

Physical infrastructure constitutes a high proportion of the country’s investment. It is therefore of primary importance that these facilities which include residential buildings are maintained in order that they can serve both the architectural and aesthetical functions for which they are built. The physical appearance of residential buildings in part constitutes the basis upon which the society makes their initial judgment of the quality of services to be offered.

One of the critical problems confronting the housing industry in Nigeria is the poor maintenance practice (Afranie and Osei Tutu, 1999). The role of residential buildings in national development cannot be over-emphasized. However, in spite of the heavy investment in residential buildings, residential building owners and occupants allow their structures to care for themselves without any sustainable maintenance plan to preserve the quality of the buildings. The continued efficient and effective performance of such property depends on the nature of their buildings in addition to other factors such as enhanced conditions of service, provision of the requisite tools etc.

Maintenance primarily, is to preserve buildings in their initial functional, structural and aesthetic states so that they continue to remain as such and retain their investment value over a long period of existence. It is therefore necessitated by deterioration of the materials and components of building(s) and its environment. It is the works undertaken in order to keep or restore every part of the building(s), its contents and its environment in an acceptable standard or condition. This includes but not limited to the carrying out regular repairs of works and the replacement of items in buildings and its environment that are in deplorable conditions.

According to Seeley 1987, neglect of maintenance has accumulative results with rapidly increasing deterioration of the fabric and finishes of a building accompanied by harmful effects on the contents and occupants. Therefore, buildings are too valuable assets to be neglected in this way. In his hierarchy of needs theory Maslow (1954) identifies five basic needs which are organized into successive level of importance in an ascending order. He identified physiological needs as the most basic needs of human beings which include air, food, water, shelter (housing), sex and sleep.

BS 3811(1984), define ‘maintenance’ as “The combination of all technical and associated administrative actions intended to retain an item in, or restore it to, a state in which it can perform its required function.”

Maintenance brings about improved utilization of buildings ensuring the highest safety standards. It must be emphasized that more rather than less maintenance work is necessary if the value and amenity of the nation’s building stock was to be maintained. A good maintenance system is also a good disaster mitigation system. Moreover, a well operated system of maintenance for buildings and equipment has the effect of being a very effective disaster mitigation measure in terms of cost and facility usage. It ensures the most economic way to keep the building and equipment in the best of form for normal use, given the original design and materials (http\\www.oas.org\en\cdmp).

When buildings are neglected, defects can occur which may result in extensive and avoidable damage to the building fabric or equipment. Poor maintenance has resulted in damage and deterioration to some residential buildings in Nigeria. Neglect of maintenance especially in relation to replacing electricity cables after thirty of use can also give rise to fire and safety hazards, which could result in the property owner being found liable for any injuries and damages.

1.2       Statement of The Problem

The main purpose of maintenance of property is essentially to retain its values for investment, aesthetic, safety, durability, with a view to ensuring that the property is continually in good condition for habitation and to the satisfaction of the owner(s) / users and communal prestige (Brennan, 2000).  Some residential have not seen any significant maintenance or show little signs of maintenance since they were constructed, some dating back to the colonial era. This has resulted in such buildings being in a dilapidated state with some being abandoned. This lack of maintenance by the owners and occupants of these facilities often leads to reduced lifespan of these buildings (Melvin, 1992), which invariably defeat the purpose for which they are developed. The problem of ownership of these buildings, where occupants regard it not as their own property and handle it without due care largely have resulted in the state in which most residential buildings find it. In some cases occupants do not recognize the building as their property and hence have passive attachment in relation to the efficient use and maintenance of the building.  In order to evolve an effective good maintenance practice regime for residential property, knowledge of effectiveness of the strategies adopted in the maintenance of this properties becomes necessary, hence this study “An assessment of the impact of property maintenance on residential property in Nasarawa.

1.3       Aim and Objectives of the Study

1.3.1    Aim

The study is generally expected to assess the impact of property maintenance on residential property in Nasarawa.

1.3.2    Objectives of the Study

      The specific objectives of this study are:

1. To Assess the current condition and state of residential buildings in the study area
2. To identify the underlying principal causes of poor maintenance of residential properties in Nasarawa.  
3. To analyse the maintenance policy and practice adopted in the maintenance of residential properties in the study area
4. To assess the impact of property maintenance on residential property value in the study area

1.4       Research Questions

In line with objectives of this study, the following research questions shall serve as a guide to the researcher:

1. What is the current condition and state of residential buildings in the study area
2. What are the underlying principal causes of poor maintenance of residential properties in Nasarawa? 
3. What are the maintenance policy and practice adopted in the maintenance of residential properties in the study area
4. Does property maintenance have significant impact on residential property value in the study area

1.5       Significance of the Study

This study is essential in the sense that it would not only contribute to knowledge and theory, but will also contribute to good maintenance practice of residential properties Nigeria. This is because the study will attempt to find out the factors that have contributed to the present state of non-maintenance of residential buildings some of which have been abandoned due to its state of deterioration.

Furthermore the study will assist managers of residential property to become aware of the current state of their building infrastructure and its effect on the safety and health of occupants and also to put in place adequate innovative measures to prevent new buildings put up to suffer deterioration which ultimately lead to increased cost in restoring these buildings to their original state.

With increasing demand for efficiency and effectiveness from workers in the public and private sector by the populace, this study will attempt to establish the linkage between the present states of residential buildings in relation to the social and economic impact it has on the occupants.

1.6       Scope and Limitation of the Study

The study is limited to the assessment of the impact of property maintenance on residential properties, the scope is limited to Nasarawa town in Nasarawa state. It is also limited by the objectives of the study as it is strictly out to assess the cause of poor maintenance and its impact of residential property value in Nasarawa.

Data gathering suffered due to delay in getting responses due to the schedule of work of especially personnel of the study area. In addition records keeping was a problem for all the institutions surveyed such that in some situation researcher had to collate the number of buildings himself. This also resulted in difficulty in identifying the buildings.

Notwithstanding the above limitations, the study results have not been affected and thus are credible, reliable and useful for any purposes of evaluation and feedback.

1.7       Operational Definition of Terms

Residential Properties: Oxford advanced learners dictionary defined residential properties as properties suitable for living in, consisting of houses rather than factories, or offices.

Property: Property is by property dictionary as anything that is owned by a person or entity, which be divided into “real property” and personal property.

Infrastructure: This is seen as a wide range of economic and social facilities crucial to creating an enabling environment for economic growth and enhances the quality of life, Nubi (2002).

Value: Value is basically the worth of a thing which depend largely on the basis of assessment and unit of measurement.

Property Value: property value according too Millington (1981) is the money obtainable from a person willing and able to purchase property when it is offered for sale by a willing seller, allowing for reasonable time for negotiation and with the full knowledge of the nature and uses which  the property is capable of being put.

 1.8      HISTORICAL BACKGROUND OF THE STUDY

Nasarawa Local Government area of Nasarawa state was established in 1976 during the military regime under the leadership of general Mohammed Administration, the local government have thirteen 13 wards and it consist of six department which is responsible for carried out the activities personal social primary health care agriculture and natural resources. The state derived its name from the local government Nasarawa. The local head quarter is between latitude 7.8 degree east by Karu.

 The also shared boundary with Benue state, Toto Local government area and federal capital territory, the local government have a population 187220 by the 2006 census through contest in the law court it has multi ethnic Afo, Agatu, Gwandara etc.  

THE PEOPLE AND THEIR OCCUPATION

The major ethnics groups are Hausa, Afo, Gwari, and Gwandara. The earliest inhabitants were predominantly farmers and some of them are fishermen they use river for their routine fishing.

 Besides, they were also engaged in rearing of cattle, black dying and weaving. Meanwhile, trading is one of their major occupation as a result of the establishment of the Federal Polytechnic.

TOPOGRAPHY

From an elevation of about 1,500 to 1,000 meters, the Nasarawa descends in a series of step to the wide Benue through the northern part of the low lands forms a continuous plain about 50 kilometers wide which gradually slopes from the foot of the Nasarawa towards river benue.

The western part of the northern low land is an area of transaction, only part of it can be regarded as belonging to the Benue plains.

THE CONTRIBUTION OF URBAN INFRASTRUCTURE TO RESIDENTIAL REAL ESTATE INVESTMENT IN AWKA, ANAMBRA STATE

THE CONTRIBUTION OF URBAN INFRASTRUCTURE TO RESIDENTIAL REAL ESTATE INVESTMENT IN AWKA, ANAMBRA STATE

ABSTRACT

This project titled “The contribution of Urban Infrastructure on Residential real estate investment in Awka, Anambra State” is aimed at assessing the effects of urban infrastructure on residential real estate investment in the study area, to achieve this aim the following specific objectives shall be pursued:  to identify the types of residential properties, to identify the types of infrastructure available in the study area, to access the adequacy of the infrastructure and to analyze the relationship between infrastructural facilities and property value. The researcher adopted the use questionnaire to collect data from the research population which consists of tenants, landlords, property developers and real estate firms that resides in Awka the capital of Anambra state. The use of tables, percentages and descriptive statistical tools were used to analyze the data. The results of analysis indicates that the availability of urban infrastructure positively affect the rental value of residential property this is shown clearly in the rental values of properties located in rural areas where there are no infrastructures and those found in urban areas where infrastructures such as electricity, portable water, medical centers etc are found.

CHAPTER ONE

1.0       INTRODUCTION

1.1       BACKGROUND OF THE STUDY

An important barometer for measuring an urban areas functionality, liveability and development is its physical infrastructure. The efficiency of any urban area depends largely on the provision of efficient infrastructural facilities and services (Babarinde, 1998). Okusipe (1999) posited that apart from being a major pointer to environmental quality urban infrastructure is a critical agent for the socio-economic development of any urban area. He further asserted that urban infrastructure plays an important and indispensible role in economic, social and environmental aspects of life of an urban setting. It has tremendous impact on the quality of urban life. It is a key developmental asset of any country in that it provides the backbone for industrial concerns located within an urban area to effectively and efficiently drive their production processes.

Urban infrastructure cover a wide spectrum of services and facilities, namely; electricity, water, roads, walkways, waste disposal systems, communication, primary health facilities and services, schools and housing. These are more often provided by the government. Where urban infrastructure is adequately provided and efficiently managed productive and profitable land uses are usually attracted towards the area. These uses out bid/out compete less productive uses through better rent offers. This competition for locations with good urban infrastructure usually results in an increase in land and property values, either sales or rentals (Harvey 1993). This study therefore examines the contribution of urban infrastructure to residential real estate investment in Awka, Anambra state.

1.2       STATEMENT OF THE PROBLEM

The needs and important of urban infrastructural cannot be underestimated since investment in infrastructure is well connected to all factors of economic development. This always includes an increase always offset by increasing opportunities and income to the general vicinity. The closer a residential area, is to new infrastructural projects, the higher the increase in its value. However, the reverse relationship is also true as failing in infrastructural investment is closely related to hold that, decaying or neglecting infrastructure is a major determent of economic decay and recession.

The problem therefore is that, this important and significant relationship between urban infrastructures and property value has not being properly identified thereby resulting in neglect in terms of infrastructural investment especially in the study area.

1.3       AIM AND OBJECTIVES

The aim of this study is to examines the contribution of urban infrastructure to residential real estate investment in Awka, Anambra state. In order to achieve this aim, the following objectives are critical:

1. To identify the types of infrastructure available in the study area.
2. To examine the level of urban infrastructure in the study area.
3. To analyse the effects of urban infrastructure on residential property value in the study area.
4. To make appropriate recommendation on the way forward.

1.4       RESEARCH QUESTION

            Below are research question derive from the objective listed above.

1. What are the types of urban infrastructure in the study area?
2. What is the level of urban infrastructure in the study area?
3. What are the effects of urban infrastructure on residential property values in the study area?

1.5       JUSTIFICATION OF THE STUDY

Similar studies in the past have revealed the poor state of our urban infrastructure and its consequential effect on property value with much emphasis on the relationship that exist between infrastructure and property value. However the income generation capacity of infrastructural provision to the public authorities through high rental values, rates and taxes has been neglected. This study is therefore necessary to assist public authorities in putting more efforts in infrastructural investment and as well take full advantage of the income that can be generated from such investment.

1.6       SCOPE AND LIMITATION OF THE STUDY

The research work is confined to the study of the contribution of urban infrastructure to residential real estate investment in Awka, Anambra state. It deals with rental value of residential properties such as single room, two bedroom flats and three bedroom flats which are the common types of residential properties found in the study area. The work activities however, will cover the provision of road network within a period of 2010-2015.

1.7       DEFINITION OF TERMS

Some of the key words used in this work and their meaning as contain and used in the research are:

Infrastructure: This is seen as a wide range of economic and social facilities crucial to creating an enabling environment for economic growth and enhances the quality of life, Nubi (2002).

Property: Fraister (1993), stated that properly is the subject matter of ownership that anything which belongs to a person going to exclusive right to enjoy a thing. Example being land and building, real properties, denotes interest and right inherent in the owners of the physical real estate. This cluster of right which could be made the subject of a real activities “title” that signifies the lawful right of possession.

Value: Value is basically the worth of a thing which depend largely on the basis of assessment and unit of measurement.

Property Value: property value according too Millington (1981) is the money obtainable from a person willing and able to purchase property when it is offered for sale by a willing seller, allowing for reasonable time for negotiation and with the full knowledge of the nature and uses which  the property is capable of being put.

1.8       HISTORICAL BACKGROUND OF THE STUDY

Awka (Igbo: Ọka)^[2] is the capital city of Anambra State, Nigeria. The city was declared capital on 21 August 1991, after the creation of Anambra and Enugu state, which moved the capital from Enugu to Awka (an administrative center since pre.-colonial times). The city has an estimated population of 301,657 as of the 2006 Nigerian census, and over 2.5 million as of a 2018 estimate. The city is located at199.1 kilometres (123.7 mi), by road, directly north of Port Harcourt in the centre of the densely-populated Igbo heartland in South East Nigeria.^[3]

The West-East Federal highway links Lagos, Benin City, Asaba, Onitsha, and Enugu to Awka and several local roads link it to other important towns such as Oko ,Ekwulobia, Agulu, Enugwu-Ukwu, Abagana and Nnewi.

Strategically, Awka is located midway between two major cities in Northern Igboland, Onitsha and Enugu, which has played a significant role in its choice as an administrative center for the colonial authorities and today as a base for the Anambra State government.

“Awka has a certain kind of aura about it, because it was the place of the blacksmiths that created implements which made agriculture possible.” – Chinua Achebe

Awka is one of the oldest settlements in Igboland, established at the centre of the Nri civilisation, which produced the earliest documented bronze works in Sub-Saharan Africa, around 800 A.D., and was the cradle of Igbo civilisation at large.

The earliest settlers of Awka were the Ifiteana people, the name Ifiteana roughly translating into ‘people who sprouted from the earth.’ The people, themselves, were renowned as farmers, hunters and adept iron workers, all of whom indigenously inhabited the banks of the Ogwugwu stream, in what is now known as the Nkwelle ward of the city.^{[citation needed]}

The deity of the Ifiteana was known as Ọkịka-na-ube, or the god renowned for the spear, and the Ifiteana were known as Ụmụ-Ọkanube, or “worshippers of Ọkanube,” eventually shortened to both Ụmụ-Ọka and simply Ọka (Awka when written in its anglicised form).

In ancient times, Awka was populated by elephants, insofar that a section of the town was named Ama-enyi, with a corresponding pond, Iyi-Enyi, used for elephants to gather to drink. The elephants were hunted for their prized ivory tusks (okike), which were kept as a symbol to the god Ọkanube in every Awka home, with hunting medicine stored in the hollow of the tusk.

Over time, the town became known for metal working and its blacksmiths were prized throughout the region for making farming implements, dane guns and such ceremonial items as Oji (staff of mystical power) and Ngwuagilija (staff of Ozo men).^[5]

During pre.-colonial times, Ọka became famous as the Agbala oracle, specifically a deity that was said to be a daughter of the great long juju shrine of Arochukwu. The oracle, which Chinua Achebe used as inspiration in his book Things Fall Apart ^[6]), was consulted to whenever disputes (far and wide) occurred, until it was eventually destroyed by colonial authorities, in the early part of the twentieth century.

Before the inception of British rule, Ọka was governed by titled men known formally as Ozo and Ndichie, who were accomplished individuals in the community. They held general meetings, known as Izu-Ọka, at either the residence of the oldest man (Otochal Ọka) or a place specially designated by the titled men. He was the Nne Uzu, or ‘master blacksmith,’ irrespective of whether or not he actually knew the trade, as the only master known to Ọka was the master craftsman, the Nne Uzu.

In modern times, Awka has adopted the republican system and is currently administered by the Awka South Local Government Area. However, it still preserves its traditional systems of governance with the respected Ozo-titled men often consulted for village and community issues and a paramount cultural representative, the Eze Uzu, who is elected by all Ozo-titled men by rotation among different villages to represent the city at state functions.

Awka should not be confused with Awka-Etiti which is a town in Idemili South local government area that is often mistaken for the main capital