An Analysis of Performance of Real Estate Investments in Onitsha Metropolis and Investments in Bank Shares in Nigeria

Abstract

Real estate investments in most urban towns of Nigeria are done mostly by the informal sectors (ie private individuals). These group of investors together with formal sectors investors such as banks, insurance companies, corporate bodies  are putting considerable sums of money into real estate investment annually. Also recently the awareness of the need for the investment in securities has made a host of investors especially from the south-eastern part of Nigeria to begin to invest in equities such as bank shares. However these investments are made without knowledge and understanding of the performances of these sectors. This paper therefore focused on the analysis of the performance of real estate investments in Onitsha Metropolis and investments in bank shares in Nigeria for the period 2000-2010.

The data on rental value and capital values were sourced from the estates surveying and valuation firms in Onitsha metropolis while data on the bank shares and divided per share were sourced from the commercial banks and the Nigeria stock exchange. Data collected were analyzed, using Arithmetic mean return (AMRR), geometric mean return (RG), standard deviation and coefficient of variation. The result showed the residential properties having arithmetic mean return (AMR) of 9.59%, geometric mean return (GMR) of 9.54%, standard deviation of 3.35% and coefficient of variation of 0.34, while the bank shares have an arithmetic mean return (AMR) of 16.64%, Geometric mean return (GMR( of 9.1%, standard deviation of 38.86% and coefficient of variation of 2.34.

The performance indicators as shown by these parameters indicate that property investment is more secure than investment in bank shares.

Keywords: comparative Analysis, performance measurement, Residential properties, Onitsha Metropolis, bank shares.