EFFECT OF INFRASTRUCTURE FACILITIES ON RENTAL VALUE OF RESIDENTIAL PROPERTIES IN IBADAN

EFFECT OF INFRASTRUCTURE FACILITIES ON RENTAL VALUE OF RESIDENTIAL PROPERTIES IN IBADAN

ABSTRACT

This study examines the impact of infrastructural facilities on residential property value in Ibadan. The study examined among other things, the provision of infrastructural facilities as an impetus for real Estate development and value in the study area. The study employed the use of structured questionnaire; the data collected were analyzed through simple percentage tables. The study revealed that the residential property in Ibadan has very limited number of these infrastructure facilities. The result of inadequate provision of these facilities has in most cases being reflected in the amount of rent paid for the properties in Ibadan. It is therefore recommended that infrastructures should be provided by both the private and public sectors to better the lot of the residents and to also ensure continuous flow of investors’ income (rent).

CHAPTER ONE

1.0       INTRODUCTIONS

One of the remarkable developments associated with the process of socio- economic change in Nigeria during the last seventeen years has been the damour for increase and improvement of infrastructural facilities. Infrastructural facilities involve the provision of services which the various levels of government in the country as well as various communities are collectively involved. This also includes services provided by voluntary agencies and private individuals for the benefits of the community at large. In the light of the harsh condition Nigeria has been going through recently, sky rocketing cost of building and construction, high cost of finance and unpredictable economic conditions there has been decrease in infrastructure development and little or no maintenance of the existing stock. There has therefore, arisen a need for finding alternative means of infrastructure development as it relates up grading and managing the present. Stock, thus, preserving our built emolument. In line with the basic need of shelter and its preservation, the need to have basic infrastructure in place for the development. Individual who commits capital into real estate as an investment intends to reap optimum returns from such investments. In order to achieve this aim, the investment must be strategically positioned where it has access to basic infrastructure so as to keep this property in a state to command a constant flow of income or benefits and an appreciation in capital value. The majority of investors in residential properties development in Nigeria are individual and a handful of corporate concerns, considering the problem of increasing cost the dilapidated ones still in use, infrastructure is almost static which over stretching of the existing ones continues. The federal government and it agencies like the development control have been doing all they can to improve the present infrastructural facilities stock. But the fact remains that the government does not have enough fund to improve on the entire stock. The study is critically examining the presence state of infrastructural facilities and will also recommended ways to improve these facilities. This is an attempt to increase values to tenants, optimize returns to property owners and presence our build environment. The findings could therefore be applicable to other residential areas presenting problem in Nigeria.

1.1       STATEMENT OF THE PROBLEM

Infrastructure facilities have over the years contributed immensely to the general well being of developed nations. Developing nations have also being able to exploit these facilities though not at a highly appreciative level Nigeria has over the years being grappling with the problem of inadequate infrastructural facilities. Corruption has being the bare of adequate provision of these facilities. Residential properties in Ibadan has very limited number of ‘wit1i these infrastructure facilities. The result of inadequate provision of these facilities has in most cases being reflected in the amount of rent paid for properties in Ibadan Residential properties areas that have of these facilities ar experiencing poor maintenance which affect their longevity the problem is Property owner in Ibadan are often unaware of how infrastructural facilities could to a large extent influence rent paid for there properties. This is evident in the fact that only few of them make effort to either proved these facilities or make effort to ensure that these facilities are provided.

1.2.      AIM AND OBJECTIVES OF THE STUDY

The aim of this study is to evaluate the impact of infrastructural facilities on rental values of residential property taking Ibadan as a case study. To achieve this aim the under listed objectives will be pursued.

1. To identify the infrastructural facilities in the study area.
2. To analyze the relationship between infrastructural facilities and property value.
3. To determine the nature and pattern of trends in rental values of residential property in the study area.

1.3.      SIGNIFICANCE OF THE STUDY

The research will help people to know about the impact of infrastructural Facilities on rental values of residential property development. The impact of infrastructural facilities plays in the property market and how to achieve feasible rental values or yields in residential properties In the future cannot be over emphasized in this work as it is used by Students and researchers.

1.5       Significance of the Study

This project is an attempt to assess the effect of infrastructural facilities on residential property value in Ibadan, the study discuss the types of residential property in the study area, identifies the types and condition of available infrastructural facilities available and tries to establish the relationship between infrastructural facilities and residential property rental value. The result of research will help developers, investors, real estate managers and valuers and the government to know the relevance of infrastructural facilities to residential properties and its effect on rental value thus given them a better chance to an informed decision.

The study will 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.

This study will also serve as a reference material for subsequent research related to the effect of infrastructural facilities on residential property value where researchers, students and scholars will tap into the wealth of knowledge provided in this study.

1.6       Scope and Limitations of the Study

The research work is confined to the study of the assessment of the effect of infrastructural facilities on residential rental value in Ibadan. 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.

There are several limitation encountered during the conduct of this research. These limitations include: non availability of adequate data which played a major limitation to this write up because of non-cooperative attitude of some respondents who were not willing to give information and data needed to aid findings, time was another major factor which affect the study as the researcher do not have enough time to make detailed investigation on all the aspects of the study. And the general unwillingness of some respondents to fill the questionnaire provided for the research made it difficult to gather data needed for this research study at the most appropriate time.

1.7       Operational Definitions 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 to 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       BACKGROUND OF THE STUDY

Ibadan  is the capital and most populous city of Oyo State, in Nigeria. It is the third-largest city by population in Nigeria after Lagos and Kano, with a total population of 3,649,000 as of 2021, and over 6 million people within its metropolitan area. It is the country’s largest city by geographical area. At the time of Nigeria’s independence in 1960, Ibadan was the largest and most populous city in the country, and the second most populous in Africa behind Cairo.

Ibadan is located in south-western Nigeria, 128 kilometres (80 mi) inland northeast of Lagos and 530 kilometres (330 mi) southwest of Abuja, the federal capital. It is a prominent transit point between the coastal region and areas in the hinterland of the country. Ibadan had been the administrative centre of the old Western Region since the early days of British colonial rule, and parts of the city’s ancient protective walls still stand to this day. The principal inhabitants of the city are the Yoruba people, as well as various communities (notably Igbo, Hausa, and Efik) from other parts of the country.

Ibadan, coined from the phrase “Eba Odan”, which literally means ‘by the edge of the meadow’, came into existence in 1829, during a period of turmoil that characterized Yorubaland at the time. It was in this period that many old Yoruba cities such as old Oyo (Oyo ile), Ijaye and Owu disappeared, and newer ones such as Abeokuta, new Oyo (Oyo atiba) and Ibadan sprang up to replace them.

According to local historians, Lagelu founded the city, and was initially intended to be a war camp for warriors coming from Oyo, Ife and Ijebu.^[7] As a forest site containing several ranges of hills, varying in elevation from 160 to 275 metres, the location of the camp offered strategic defence opportunities. Moreover, its location at the fringe of the forest (from which the city got its name) promoted its emergence as a marketing centre for traders and goods from both the forest and grassland areas.

In Ibadan, unlike other Yoruba cities with traditional kingship institutions, the warrior class became the rulers of the city as well as the most important economic group. Ibadan has a tropical wet and dry climate (Köppen climate classification), with a lengthy wet season and relatively constant temperatures throughout the year. Ibadan’s wet season runs from March through October, though August sees somewhat of a lull in precipitation. This lull divides the wet season into two different wet seasons. November to February forms the city’s dry season, during which Ibadan experiences the typical West African harmattan. The mean total rainfall for Ibadan is approximately 1,230 millimetres or 48 inches, falling over about 123 days. There are two peaks for rainfall, June and September. The mean daily temperature is 26.46 °C or 79.63 °F, the mean minimum 21.42 °C or 70.56 °F, and the relative humidity 74.55%.