Relative Importance of Location Factors Affecting Real Property Investment Decisions In Nigeria

Abstract

Majority of real property investments in Nigeria are done by individual or household investors, followed by partnership and institutional investors. Considering the large capital outlay involved, investors prefer to invest in locations where investment would yield maximum returns within the shortest reasonable time. This paper, therefore, focuses on the importance of location factors affecting real property investment decisions in Nigeria. Survey research design was adopted. Data for the study consists of primary sources which were sourced from questionnaire through the Estate Surveying and Valuation firms in Nigeria. The study concentrated on the six geo-political regions in Nigeria. The study identified, selected and classified location factors affecting real property investors' choices in Nigeria into 3 components. The identified and classified factors are Municipal Infrastructure-based factors, Social Infrastructure-based factors (Accessibility/proximity to CBD) and Economic/Legalbased factors. The Relative Importance Index was used to determine the location factor which was most important in the real property investors' choices in the study area. The Economic/Legal-based factors, ranked highest for the three groups of real property investors in the study area with (RI) at (0.968), (0.955) and (0.961) for individual/household, partnership and institutional real property investors respectively. Therefore, Economic/Legal-based factors are the most significant factors contributing to location choices in Nigeria. Towards sustainability of housing units thus depends on making cost of land and process of property documents less cumbersome, while adaptation of smart city approach to city urban planning and services management is desirable.