Comparative Study of the Yields Derivable from Residential Property Investment in selected Government Layouts, Lagos, Nigeria

Abstract

There has been concentration of investment in residential property development for high income earners in the Government Reserved Areas (GRA) of Lagos metropolis. This research therefore investigates the yields that investors could derive from such development. In attaining the aim and objectives of the study, six GRAs were purposely selected while one hypothesis was formulated and tested. The hypothesis is that “there is significant relationship between market yields and addition to housing stock within the period of 2003 – 2012 in the study area”, while the null hypothesis is that “there is no significant relationship between market yields and addition to housing stock in the study area”. Simple regression analysis was carried out to determine the relationship between yields and the number of residential property supplied to the market within the study period at 0.05 confidence levels. It was found that there is statistically significant relationship between yields and addition to housing stock in two locations (Magodo and Ilupeju). This implies that though there is statistically significant relationship between the variables; yield only account about 55% and 56% variability in addition to housing stock in the respective GRAs. However, there are no statistically significant relationships between yields and addition to housing stock in four locations (Ikeja, Gbagadav, Ogudu and Adeniyi). The yield explained only 11.87% variability in addition to housing stock across the selected areas. The implication is that decision to invest in the individual GRAs is not entirely based on yields. The study recommended that since yield explains only low percentage of variability in residential property development in the form of annual addition to housing stock, further research should be carried out to discover other factors necessitating residential property investment decision making in the study area.

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