Assessing the Factors that Account for Variations in Residential Property Investment Returns Relative to Infrastructure Conditions in North Central Nigeria

Abstract

Variation in the returns on residential property investment in the same region or location in spite of availability of infrastructure is a course for action. This paper assessed the factors that account for the variations in residential property investment returns in relation to infrastructure conditions in the North Central Nigeria. Data were collected and analysed from 765 closed-ended questionnaires administered through stratified sampling technique in Abuja, Jos and Ilorin respectively. Descriptive and inferential methods were adopted to analyse data collected. The result revealed a better rate of return on residential property investment in Abuja than Jos and Ilorin and a significant variation in the rate of returns existed across the 3 cities. Analysis also show that infrastructure conditions are better in Abuja, good in Jos and fair at Ilorin as assessed using condition index developed through the scoring analysis and measured against the standard rating developed by AAPPA (2010). Further, result from factor analysis indicates that, infrastructure conditions has accounted for 74.087% variation in the rate of return on residential property investments in the study area. Two (2) main categories of infrastructure types are responsible for such variation with the first ‘Aesthetic factor’ accounting for 54.56% with infrastructure type such as recreation, drainage, waste disposal and streetlight. The second types are labelled ‘Freedom Factor’ with power (electricity), access roads, security, education, health, and water supply. The study concluded that variation in residential property investment returns is influenced by availability and functionality of infrastructure. A recommendation of stakeholders in real estate investment consultation was made to assist in making best investment decision relative to infrastructures that are responsible for higher returns on property investment.