Comparative Analysis of Rent Differential in Selected Residential Areas in Obio/Akpor Rivers State
Chapter One
Objective of the study
The objectives of the study are;
- To identify the factors that most influence any such rent differentials in the study area
- To determine the factors that influence any differentials of residential houses rent that may exist in the study area.
- To determine the relationship between the residential housing rent and the income classes of the household head in the study area.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Conceptual framework
If one begins by making the assumption that individuals are rational; that the level and quality of information available to them is unlimited; and that their actions are unconstrained, then one can investigate the decision-making process. For instance, the objective of the economic man is to optimize his economic and financial returns in a utilitarian fashion. These hypothetical persons will assess the information available to them on the economic benefits of alternative locations and if those benefits, or utilities, exceed those of the current place of residence relocation will occur. In this sense the decision-making process is almost mechanical and the range of criteria used to make judgments is both narrow and predetermined. This rational decision-making process in residential choice was further conceptualized and buttressed in Wolper’s (1965) Place Utility Matrix theory. Wolpert (1965) defined, “Place Utility Matrix” (UM) as a framework for studying rational decision making in the context of movement. The place Utility matrix (U) consists of variables (X) places so that ‘Umn’ gives the utility of place ‘n’ on characteristic of variables ‘m’. The list of variables that is used to assess the utility of places can vary from person to person or group to group as may the relative significance, which is attached to each variable. For this latter reason to hold, it is important to multiply the place utility matrix by a vector of ‘m’ weights, one for each variable, which will yield a weighted place utility matrix (W). The sums of the values in the n columns of W will give scores for each place. The individual or group will then use these scores both to judge the utility of his/her current place of residence (which can be taken to be one of the n places in the matrix) vis-a-vis the n-1 other places and to decide which of the other places would provide the maximum utility, comfort and peaceful resident. In the hand of the economic man the place utility matrix is a very precise decision making instrument. The list of variables to be used is short since they merely reflect economic well-being; alternatives are assessed rationally with unlimited accurate information; and readjustments are made once sub-optimality becomes evident. If the economic man assumption is removed and replaced by the simple notion of rationality then the place utility matrix becomes rather more realistic. By this means the range of variables to be used is much enlarged, although relocation still depends upon evidence from ‘W’. In addition to economic variables, social, political and environmental forces, for example, can now be brought into play. The potential movement may use such variables as environmental stress, security of lives and property, housing quality, recreational and educational facilities, social class affiliation, employment opportunity, land availability and so on, which will weigh according to the assessment of their relative importance. In other respects, the place utility matrix (W) can be used in a similar fashion to that adopted by economic man, although the resulting decision may differ because social variables have out-weighed economic ones- socio-cultural affiliation-affinity have been weighted higher than employment opportunities etc.
However, the economist and economic geographers have found that human behaviour is by no means always rational, being at best ‘boundedly rational’ or in Leibensten’s (1976; 1978) phrase ‘selectively rational’. Hence, relocation is not necessarily a consequence, either because rational decision-making is not translated into behavour, or alternatively, the decision-making process itself may lack logicality. It is constrained within bounds, which predetermines a sub-optimal conclusion. These affirmed invulnerability of human to scientific enquiry, human inclination to oscillate residence and movement of people within a city is resistance response to centrifugal forces that hitherto propel people to move and buttressed by early migration progenitors. This is a modification of place utility, the guise of spatial pattern, resulted from problems of segregation, in the sense of spatial separation. In furtherance of this Udo (1978) submission that non-economic factors also induce residential choice such as issues of socio-psychological and political reasons (war, ethnic conflict, religious violence, mass-movement, and out-break of epidemics) leading to a rational albeit kinetic or coerced, decision to relocate upon which this paper is based on peoples’ perception of safety of lives and properties influenced residential choice in Kaduna metropolis after 2000 sectarian crises that engulf the entire residential areas expect the Government Reserved Areas that are not susceptible to violent conflicts because of their socio-economic class polarization.
Micro-level Determinants in Housing Prices and Housing Rent
There are various determinants influencing housing prices or housing rent, including both macro determinants and micro determinants. Macro determinants, such as economic development, land supply, and migrant population, have an important impact on housing prices or housing rent. However, in the short term, within the city, the main factors affecting the spatial differentiation of housing prices or housing rent are micro determinants. The study area of this article is within the sixth ring road of Beijing, China. Therefore, we will focus on reviewing the impact of micro-level influencing factors on housing prices or rental price. The hedonic price model is extensively adopted to explain the factors that influence the price of housing. Many studies have used this model to estimate the amount that a person is willing to pay for a given property, which act as a function of several characteristics of the house.
CHAPTER THREE
RESEARCH METHODOLOGY
Research is the process of arriving at a dependable solution to problems through planned and systematic collection, analyzing and interpretation of data (Osuala, 1993).
Green and Full (1975) defines research methodology as the specification of procedures for collecting and analyzing the data necessary to solve the problem at hand such that the differences between the cost of obtaining various levels of accuracy and the expected value of the information associated with each level of accuracy is optimized.
Thus, in this chapter the method and techniques of data collection and analysis for this study are discussed in details, research design, population of study, sample and sampling technique, sources of data collection, research instrument, validity of the instrument, reliability of the instrument, procedure for administration of research instrument, as well as the limitation of the research methodology. This will be important in order to impact of human resource planning on organizational performance in clan development company Lagos.
Research Design
The research design adopted in this research work is the survey research design which involves the usage of self-designed questionnaire in the collection of data. Under the survey research design, primary data of this study will be collected from Obio/akpor Rivers State in order to determine Comparative analysis of rent differential in selected residential areas in Obio/akpor Rivers State. The design was chosen because it enables the researcher to collect data without manipulation of any variables of interest in the study. The design also provides opportunity for equal chance of participation in the study for respondents.
Study area
Obio-Akpor is a local government area in the metropolis of Port Harcourt, one of the major centres of economic activities in Nigeria, and one of the major cities of the Niger Delta, located in Rivers State. The local government area covers 260 km2 and at the 2006 Census held a population of 464,789. Its postal code or ZIP code is 500102. Obio-Akpor has its headquarters at Rumuodomaya. The original indigenous occupants of the area are the Ikwerre people, a subgroup of the Igbo people. Historically Obio akpor people are descendants of aro migrators who moved inland.
Obio-Akpor is bounded by Port Harcourt (local government area) to the south, Oyigbo and Eleme to the east, Ikwerre and Etche to the north, and Emohua to the west. It is located between latitudes 4°45’N and 4°60’N and longitudes 6°50’E and 8°00’E.
Covering around 90 sq mi, Obio-Akpor is generally a lowland area with average elevation below 30 metres above sea level. Its geology comprises basically of alluvial sedimentary basin and basement complex. The thick mangrove forest, raffia palms and light rainforest are the major types of vegetation. Due to high rainfall, the soil in the area is usually sandy or sandy loam. It is always leached, underlain by a layer of impervious pan
Population of Study
The population of study is the census of all items or a subject that possess the characteristics or that have the knowledge of the phenomenon that is being studied (Asiaka, 1991). It also means the aggregate people from which the sample is to be drawn.
Population is sometimes referred to as the universe. The population of this research study will be Seventy-five (75) residents of Obio/akpor Rivers State.
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND DISCUSSION
This chapter is about the analysis and presentation of data collected from the field through questionnaire. The analysis of the data with particular question immediately followed by the presentation of findings.
As mentioned in chapter three, 50 questionnaires were administered and 50 were retrieved and necessary analysis was carried out on them and presented as follows:
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain Comparative analysis of rent differential in selected residential areas in Obio/akpor Rivers State. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of rent differential in selected residential areas in Obio/akpor Rivers State
Summary
This study was on Comparative analysis of rent differential in selected residential areas in Obio/akpor Rivers State. Three objectives were raised which included: To identify the factors that most influence any such rent differentials in the study area, to determine the factors that influence any differentials of residential houses rent that may exist in the study area and to determine the relationship between the residential housing rent and the income classes of the household head in the study area. In line with these objectives, three research questions and research hypotheses were formulated and three null hypotheses were posited. The total population for the study is 75 residents of Obio/akpor Rivers State. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study.
Conclusion
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. As with asset prices in the equity and bond markets, residential property valuations are vital to the processes of performance measurement, acquisition and disposal decisions of an investor. Thus, if the advice given by estate surveyors and valuers is incorrect, it will affect all the parties concerned: the investors, estate surveying and valuation profession and the economy of the nation. For example, inaccurate valuation will prevent investors from making right investment decisions. This could pose a serious threat to the credibility and integrity of valuers and even damage the public image of the estate surveying and valuation profession in the nation. This could also lead to the profession being obsolete and encourage incursion of other professionals into this core area of the Estate Management profession. Also, residential property investors need to take cognizance of this in decision making. This will enable them to know those features and characteristics of property and location there are required for either rentals or sales residential property investment
Recommendation
There is the need for government to harness development potential within the local government of the study area to create job opportunity so as to reduce precious time and resources spent on travel cost to workplaces. In addition, to sustain property market in the study area, it is suggested that prospective property developers should take cognizance of locational, structural and neighbourhood factors that significantly affect property value in the study area as this would help the marketability and viability of the investment
References
- Adegoke, O. J. (1995), “A Critique of Investment Method of Valuation Practice of Estate Surveyors and Valuers in Ibadan Metropolis” An Unpublished B.Sc. Thesis Submitted to Obafemi Awolowo University, Ile-Ife
- Adegoke O. J. (2006), “A Study of Valuer Heuristic Behaviour and Valuation Reliability in Lagos Metropolis”, An Unpublished M.Sc. Thesis Submitted to Obafemi Awolowo University, Ile-Ife
- Adegoke O. J. (2014) “Critical Factors Determining Rental Value of Residential Property in Ibadan Metropolis, Nigeria”, Property Management, 32 (3), 224 – 240
- Agbola, T. and Alabi, M. (2000). Sustainable Housing Delivery: Lessons from International Experiences. A Paper Delivered at the National Workshop on Sustainable Housing Delivery in Nigeria held at Sheraton Hotel, Abuja.
- Anon, (1996), “Surveyors Wallow in Doom and Gloom”, Daily Telegraph, 22 October, p 27.
- Babalola, S. J, UmarA. I. and Sulaiman L. A. (2013), “An Economic Analysis of Determinant of House Rents in the University Environment”, European Scientific Journal, 9 (19), 99-111
- Bello, V. A., (2007), “Flooding and Property Values in the Built Environment: A Case Study of Ala River in Akure”, An International Conference paper on Towards a Sustainable Built and Natural Environment, Faculty of Environmental Design and Management, Obafemi Awolowo University, Ile-Ife, Nigeria.
- Blackley, D. M. (1999). The long-run elasticity of new housing supply in the United State: empirical evidence for 1950 to 1994. Journal of Real Estate Finance and Economics, 18(1), 25-42.
- Britton, W., Davies, K. and Johnson, T. (1989), Modern Methods of Valuation, 8th Edition Estate Gazette Ltd, London
- Case, K. E., & Shiller, R. J. (2003). Is there a bubble in the housing market? Brookings Papers on Economic Activity, 2, 299-361.
- Cheshire, Paul C. and Stephen C. Sheppard (1995), “On the Price of Land and the Value of Amenities,” Economica, 62 (127): 247 – 267.
