Comparative Analysis of The Performance of Residential Investment Real Estate In South-Eastern Nigeria, From Year 2000-2016.
Journal Title: IOSR Journal of Economics and Finance (IOSR-JEF) - Year 2018, Vol 9, Issue 1
Abstract
This study is important,particularly now that emphasis is on investment performance analysis all over the world and especially in South-Eastern Nigeria, where decisions are often made to invest inreal estate with little or no recourseto performance measurement. Two states were chosen out of the five south eastern states, and from each, three locations were isolated for the study; bungalows, blocks of flats and detached houses on two floors were used for the study.136 estate surveyors and valuers in private practice (Owerri: 56, Enugu: 80)) supplied data on annual rental and capital values of the properties managed by them. The yearly returns on investment were computed from the appraised capital values and annual rental values of the various types of residential properties in the study area between 1999 and 2016;using the Holding Period Return (HPR) method. Investment performance was computed by finding the risk- return ratio of various property investments. Risk was calculated by finding the standard deviation of the yearly returns from the mean HPR. Results of the study showed that in Enugu, 4-bedroom bungalow in Trans-Ekulu and block of 6 flats in Achara layout, had the best performance; having the lowest risk-return relationship (covariance) of 0.421, while 5 bedroom detached house in Trans-Ekulu, had the least performance with a risk-return covariance of 0.69.In Owerri, 4-bedroom bungalow in Aladinma had the best performance; having the lowest risk-return relationship (covariance) of 0.403, while 2bedroom bungalow in Aladinma, had the least performance with a risk-return covariance of 0.94. It is recommended that investors that investorsin the study area should consider investing in 4-bedroom bungalow in Aladinma, Owerrior in Trans-Ekulu and block of 6 flats in Achara layout, Enugu. Investors who already have investments in the study area should seek performance measurement of their investments to know if set objectives are being met and if not, the way forward.
Authors and Affiliations
Dr. (Mrs). Nwankwo V. C. , Prof. kalu I. U. , Dr. Igwe-Kalu A.
Keywords
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- EP ID EP414467
- DOI 10.9790/5933-0901024458.
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