AN APPRAISAL OF TREND IN RENTAL VALUE OF RESIDENTIAL PROPERTY WITHIN THE LAST TEN YEARS (2003-2012) (A CASE STUDY OF GRA (TPS100 ILORIN)

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SYNOPSIS

Housing problems in urban centers have often been viewed in terms of qualitative and quantitative inadequacy with or without attention to the problem of increasing rent.

The rent which land and landed properties may generate can be affected by some trends/factors, the aim of this study is to access and probe into the circumstances responsible for the constant changes in rental values of residential properties in the study area which are as follows; the location factors, population, characteristics of neighbourhood, architectural design, income of the people, facilities provided among others. Also, the realism of future technological advancement influences the rental value of property.

The periodic trend in rental value is considered by some landlord/owners as easy access to boost their ego. It is necessary to correct this in an area where development and commercial activities are very rampant and also in an improved speed particularly in GRA of Ilorin.

To determine the trends in rental values of properties considering its location or position in Ilorin metropolis, its level of commercial activities and the population of the people therein. It is important and paramount to estimate and arrive at the most suitable and optimum value for properties in other to forestall the level of its commercial activities and also to encourage continuous developments.

 The increment in rental values have been a major setback to some people both individual, organization, government, society etc. which have in one way or the other affected their income generation. The problems have therefore led to changes in property value which remained one of the most persistent and socio-economic problems facing properties in the society at large.

The variation and the rise in the rents of real estate had led to this research work, with the aim of examining the causes, effects and the likely solutions to the problems.

CHAPTER ONE

  1. INTRODUCTION

Housing problems in urban centre have often been viewed in term of qualitative and quantitative inadequacy with or without attention to the problem of increasing rent. As there are many urban residents struggling to get accommodation, most of them will have a roof over their heads in rented accommodation. However, the majority of the low-income earners are not comfortable because of galloping rent increases.

The  problems reached a crisis in the early 1970’s, which led the federal military government to set up a rent panel to review among other things, the level and structure rents in urban centre. Various long and short term recommendations were made and all state governments were directed to implement them.

Today, the rent situation has not improved rather it has been further worsened by the equally sprawling inflation which has tremendously shot-up the cost of building materials.

This study therefore aims at examining through empirical investigation the annual trend and variation in rental values of residential properties in GRA Ilorin, using a time frame of the past ten years (2003-2012). The study shows the variation and trend in the property rents which can serve the basis for projection into the future to aid decision making by investigators, managers and other stakeholders. It also identifies the causes of rising trend and then recommends pragmatic solutions

Moreover, several factors do affect the values of real property, these includes physical factor, economical, social, political and environmental factors.

Physical factor is the factor that best describe the physical appearance of a property in terms of the design and life cycle, availability of certain service such as water, boiler, electricity, garden and security. The economic factor is based on the reasonable significant influence of property values in a favorable economic situation of many activities that trends to yield returns consecutively.

Political factors are government laws that inference in the public use of land in a way that will benefit them. Example is the rent control edict.

Environmental factor simply describes the location of a property, the neighbourhood and population phenomenal (increase or decrease) which may cause positive or negative effect to the values of such properties.

Finally, rate of (increase or decrease) demands for landed properties, ranges from supply of properties, level of employment, availability of mortgage loans facilities, low interest rate couple with low tax burdens on property incomes are economic measures that have great influence on property values.

Social factors are the role of the socio activities that control human social behavior which coordinate their mode of interaction and cooperation within the society.

  1. STATEMENT OF PROBLEM

The creation of Kwara state led to a claim of economic and administrative actions in Ilorin, the state capital. This has given rise to government decision to reserve an area for government to aid administration. The influx of people into Ilorin metropolis as a result of the conferment of capital status has increased demand for residential property. There is inadequacy/availability of housing stock to accommodate the increasing population of the town.

The above situation has given rise to increase in house rent, increase demand for land and among others

  1. AIMS AND OBJECTIVES

The aim of this study is to examine the trends in rental value of residential properties in GRA[TPS 100] Ilorin, with a view to identifying the causes of variation in values of residential accommodation.

The specific objectives of the study one:

  1. To identify types of residential properties in the study area
  2. To examine the rental values of residential properties for the past 10 years (2003-2012) in the study area.
  3. To examine the causes of variation or trends in rental values of residential properties in the study area.
  4. To examine factors that affects the rental values of residential properties in the study area and provides recommendations to the factors.
  1. SIGNIFICANCE OF THE STUDY

The significance of this study are as follows:

  • The study is significant to Estate Surveyors and Valuers, Town planners, Quantity surveyors etc. because improved residential property development will enhance their professional performance
  • To the general public, there will be enough residential accommodation at their disposal for occupation at relatively moderate rent of study will be taken and
  • It will assist in the forecasting of future trend in rental value of residential property and therefore provide a guide for prospective investors and policy makers
    • SCOPE OF THE STUDY

The purview of this study is specifically restricted to GRA (TPS 100) neighbourhood in Ilorin, Kwara state in order to set a proper view of rental value trends of residential properties. This study covers the trends in rental value of residential properties in the study area for the past (ten) 10 years (i.e. 2003-2012)

Therefore, the study further examines the type of residential properties available within the location.

AN APPRAISAL OF TREND IN RENTAL VALUE OF RESIDENTIAL PROPERTY WITHIN THE LAST TEN YEARS (2003-2012) (A CASE STUDY OF GRA (TPS100 ILORIN)