Determinants of Market Value of Residential Properties in Ibadan Metropolis, Nigeria

Abstract

Several studies have shown that most of valuations prepared by valuers are unreliable due to valuation inaccuracy in valuation opinion which Nigeria is not excluded. As a result of Ibadan centrally placed position between the hinterland and the coast, its attracted so many traders and investors and serves as an economic centre for so many towns in the country. This study therefore examined major determinants of residential property market values in Ibadan Metropolis with a view to improving valuation accuracy in the study area. The study used random sampling to select 624 residential properties from the portfolio of 52 Estate Surveying and Valuation firms located within Ibadan metropolis, Nigeria. Data were analysed using a hedonic pricing specification. The results showed that while number of toilet (NOT), existence of burglary alarm (EOBA) and condition of the building were major factors influencing rental value of residential property in Ibadan Metropolis, number of toilet (NOT) and type of building (TOB) were the major factors influencing capital value. The study concluded that different major factors influence both rental and capital values and property valuers should recognise this in the process of carrying out residential property valuation in order to make their valuation reliable. Also, residential property investors need to take cognizance of this in decision making.

Keywords: Determinants, Inaccuracy, Residential Properties and Valuation.