An Examination of the Effects of Current Economic Recession on Real Estate Development in Enugu Urban, 2005 – 2014.
ABSTRACT
Recently, Nigeria witnessed unstable exchange rate, currency devaluation, high cost of fund e.t.c, which were attributable to the current global economic recession. As a result of the recession, real estate development in Enugu Urban was equally affected and it became impossible to access development funds due to scarcity and high cost of fund.
Meanwhile, most existing studies on the subject tend to concentrate on the demand side of the effects of the economic recession on real estate development (rent, affordability, e.t.c ) to the neglect of the supply side (cost of fund, mortgage financing and actual development of real estate development in particular).
The aim of this study was to address this supply side by critically examining the effect of the current economic recession on real estate development with a view to proffering alternative solution for cost – effective finance and development of real estate in Enugu Urban.
The specific objectives were to examine the impact of the economic recession on the quantity and quality of real property development and also to verify the effect of economic recession on the cost of fund. The data collected were through primary and secondary data collection.
The primary data collection was through the use of interview and questionnaire. In the course of the survey a mixed mode of data collection procedure was employed. Two separate questionnaires were, one for financiers and the other for real estate developers. Oral interviews were organized by the research with some Estate surveyors and manager of some commercial banks in Enugu Urban.
TABLE OF CONTENTS
Title – – – – – – – – – i
Certification – – – – – – – – – ii
Approval – – – – – – – – – iii
Dedication – – – – – – – – – iv
Acknowledgement – – – – – – – – v
Abstract – – – – – – – – – vi
Table of Contents – – – – – – – – vii
List of Tables – – – – – – – – – x
List of Maps – – – – – – – – – xi
CHAPTER ONE
1.0 Introduction – – – – – – – – 1
1.1 Background of the Study – – – – – – 1
1.2 Statement of the Problem – – – – – – 2
1.3 Aim of the Study – – – – – – – 2
1.4 Objectives of the Study – – – – – – – 2
1.5 Research Questions – – – – – – – 3
1.6 Statement of Hypotheses – – – – – – 3
1.7 Motivation for the Study – – – – – – 4
1.8 Significance of the Study – – – – – 4
1.9 Scope of the Study – – – – – – – 4
1.10 Limitations – – – – – – – – 5
CHAPTER TWO
2.0 Review of Related Literature – – – – – 6
2.1 Indicators of Economic Recession – – – – – 7
2.2 Development – – – – – – – – 8
2.3 The Process of Development – – – – – – 9
2.4 Real Estate Development – – – – – – 12
2.5 Investments – – – – – – – – 13
2.6 Types of Investment – – – – – – – 14
2.7 Attributes of Investment – – – – – – 16
2.8 Meaning of Property – – – – – – – 16
2.9 Legal Definition of Property – – – – – – 17
2.10 Kinds of Property – – – – – – – 18
2.11 Types of Property Uses – – – – – – 18
2.12 Meaning of Estate – – – – – – – 21
2.13 Concept of Estate – – – – – – – 22
2.14 Types of Estate – – – – – – – 22
2.15 World’s Current Economic Recession – – – – 23
2.16 Definition of Mortgage – – – – – – 25
2.17 Types of Mortgages – – – – – – – 27
2.18 Mortgage Institutions in Nigeria – – – – – 31
2.19 Mortgage Financing Methods- – – – – – 37
2.20 An Appraisal of Housing / Mortgage Financing in Nigeria – – 40
2.21 Problems of Mortgage Financing in Nigeria – – – – 41
2.22 Methods of Funding Real Estate – – – – – 42
2.23 Federal Mortgage Bank of Nigeria and other Mortgage Bankers – 47
2.24 Concept and Nature of Interest Rates – – – – 48
CHAPTER THREE
3.0 Research Methodology – – – – – 51
3.1 The Study Area – – – – – – – 51
3.2 Population of the Study Area – – – – – – 52
3.3 Sources of Data – – – – – – – 52
3.4 Data Collection Procedures – – – – – – 53
3.5 Survey Instruments – – – – – – – 54
3.6 Population – – – – – – – – 54
3.7 Sample and Sample Size Determination- – – – – 54
3.8 Data Analysis Procedure/Techniques- – – – – 55
3.9 Measures of Central Tendency – – – – – – 56
3.10 Measures of Relationship – – – – – – 56
3.11 Research Methods – – – – – – – 56
CHAPTER FOUR
4.0 Data Presentation and Analysis – – – – – 58
4.1 Data Interpretation – – – – – – – 58
4.2 Test of Hypotheses – – – – – – – 58
4.2.1 Test of Hypothesis 1 – – – – – – – 58
4.2.2 Test of Hypothesis 2 – – – – – – – 60
4.2.3 Test of Hypothesis 3 – – – – – – – 62
4.2.4 Test of Hypothesis 4 – – – – – – – 64
4.3 Trends in the Cost of building Materials – – – – 68
4.4 Approved Building Plan from 2005-2014 – – – – 75
4.5 Analysis of the Effects of Economic Recession on Real Estate
Development – – – – – – – 75
4.6 Diversification of the Nigerian Economy – – – – 77
4.7 Ways of Checking Economic Recession – – – – 79
CHAPTER FIVE
5.0 Summary of Findings, Recommendations and Conclusion – – 81
5.1 Summary of Findings – – – – – – – 81
5.2 Recommendations – – – – – – – 81
5.3 Conclusion – – – – – – – – 84
5.4 Suggestions for Further Studies – – – – – 85
References – – – – – – – – 86
Appendixes – – – – – – – – 89
Questionnaire – – – – – – – – 90
INTRODUCTION
is undergoing economic due to the general reduction of opportunities and high rate of unemployment. The economic recession is believed to have affected investments in the country. This follows the adverse economic conditions of the period of economic recession compounded with the problem usually associated with real estate development.
The recession in Nigeria resulted in a falling Domestic Products, a decline in the of living, hyper-inflation, rising cost of living, high levels of unemployment, lower productivity and lower per capita income. Going down to the memory lane, real estate development programs started in the 19th century with development of reliance building in 1885 in Chicago.
Reliance building was provided with infrastructure as constant power supply, recreational facilities and water supply. It was also provided with conveniences as lavatory and security outfit. It was introduced by the British Colonial Authority. The first comprehensive real estate development policy in Nigeria came into existence in 1958 with the establishment of the Western Regional Estate development policy.
Real Estate was established in Lagos, Bodija and Ibadan. The Eastern Regional Estate as well as the Northern Regional Estate established in 1961 at Enugu and Kaduna respectively. Real Estate Development Authority schemes occupy an enviable position in development planning in Nigeria both at Federal and State levels. At this time of economic recession, the real estate investment based on predictions of future growth becomes problematic.
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