NON LOCATIONAL DETERMINANTS OF LAND, HOUSING AND RENTAL VALUES IN ONITSHA, NIGERIA

Abstract

The factors responsible for the growing disaffection and public outcry against increasing urban land, housing and rental values in Nigeria have been a contentious issue in the literature. The dominant position identified locational factors such as distance from the Central Business District (CBD) and distance from major roads as major determinants. This perspective is limited by the fact that non-locational factors such as time of purchase, zoning policy, housing and neighbourhood qualities were also important determinants of these values in Nigeria. This study, therefore, examined the extent to which land, housing and rental values were determined by non-locational factors.

The study adopted a survey design drawing on urban micro-economic perspectives such as the Bid Rent, Hedonic Price theories and Urban Managerialism. Using a multi-stage sampling technique, the layouts were first identified and classified into low, medium and high density residential areas. Major wards in each of these layouts were selected in the second stage by simple random sampling while in the third stage streets were selected in the chosen wards based on their grades. Every third housing unit was then systematically selected in each of the streets for questionnaire administration. A structured questionnaire was administered on landlords (or balloted in case of multiple landlords) of 850 residential housing units. Qualitative data were obtained through Focus Group Discussion (FGD) sessions conducted among 6 - 10 residents in each of the low, medium and high density zones. Quantitative data analysis was descriptive (frequency, mean, standard deviation) and inferential using stepwise and non stepwise regression analyses. Content analysis was used for qualitative data.

Land, housing and rental values increased with distance from the CBD and from major roads because of the effect of non-locational factors. Average Land value (15mx30m plot) is N1.05 million at distances less than 1km from the CBD and N1.89 million between

4km and 5km from CBD. Non-locational factors contributed 85.4% of variations in these values and were more important determinants than the locational factors (14.6%). The contribution to overall explained variance (adjusted R2) showed that the most important determinants of land and housing values were time of land purchase (R2 = 0.478, p < 0.05) and number of rooms (R2 = 0.325, p < 0.05). The most important determinants of rental values for rooms in tenement bungalows, blocks of flats and duplexes were location in low density zone (R2 = 0.633, p < 0.05), age of layout (R2 = 0.207, p < 0.05), number of schools (R2 = 0.201, p< 0.05) and income (R2 = 0.673, p < 0.05). Housing density has a positive relationship with land values (r = 0.341, p <0.05). The FGD results confirmed time of purchase, housing and neighbourhood qualities as major determinants.

Non-locational factors including time of purchase, housing quality and neighbourhood infrastructures significantly determined variations in land, housing and rental values with distance from the CBD in Onitsha. The implication is that non-locational factors should be recognized as important determinants of urban land, housing and rental values in Nigeria. Non-locational factors such as the lending interest rates and expectation of land or house price growth are recommended for further research as possible determinants of land, housing and rental values.

Key words: Urban Land value, Housing value, Rental value, Housing density, Onitsha Word count: 487