The Effect of Climate Change on Residential Property Values in the Coastline and Non-Coastline Areas, Lagos Metropolis

Abstract

The growing reality of climate change in recent times on humans, the environment, and the world economy, among others, has continued to attract attention across the countries of the world. It is noteworthy that much of the attention and interventions have focused mainly on humans and the environment, with limited research efforts on the effect of climate change on the property market in developing countries, especially in Nigeria. Therefore, the current study aims to examine the effect of climate change on residential property values in the coastline and non-coastline areas in Lagos Metropolis, Nigeria. Primary data on residential property values (2000 to 2021) were obtained from the databases of the firms of Estate Surveyors and Valuers practicing in Eti-Osa local government (coastline area) and Ikeja local government (non-coastline area). Also, annual data on temperature, rainfall, humidity, and pressure were accessed from the database of Era5 reanalysis from 2000 to 2021. Multiple regression analysis and paired-sampled t-test were adopted to analyze the data. The result of MRA reveals that temperature exerts a negative significant effect on the values of residential properties in both the coastline and non-coastline areas at p?0.05. At the same time, pressure has a negative significant effect on the values of residential properties in the coastline area (Eti-Osa). Other climate indicators, including rainfall and relative humidity, have a negative but insignificant effect on the values of the residential properties in the two locations. Further, the result of the paired sample t-test reveals a statistically significant difference in the effect of climate change on residential property values across the coastline and non-coastline areas. The study provides decision inputs for professional valuers, the public, real estate investors, and policymakers.

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