ASSESSMENT OF RISK AND RETURNS ON RESIDENTIAL PROPERTY INVESTMENT IN KANO, NIGERIA

Abstract

The research assessed the risk and return in residential property market in Kano with a view to examining the trend in returns of residential property investment types and the risk-return in relation to residential property investment. Residential property investment return in Kano has been influenced by several risk factors which affect the property market and the economy, Kano has been chosen for this study because is the commercial centre of northern Nigeria and due to the inflow of people the residential housing infrastructure is growing. Exploratory and descriptive research design was adopted, population of study is estate firms in the study area and systematic ramdom sampling techniques was adopted to select properties in each firm portfolio using Frankfort-Nachmias (1996) to arrived at sample size of (338) and survey questionnaires was used to collect data. The study utilized descriptive (standard deviation, viariance, line graph) and inferential method (ANOVA) & factor analysis. The results of descriptive analysis across the five markets showed. The properties sampled are1Bedroom, 2Bedroom, 3Bedroom and 4Bedroom which showed that Badawa and Bompai maintained double digit of growth over the other three market. And the variance result revealed that, variation in returns on residential property investment across the market in the selected areas of Kano is statistically significant since the p.value across the market are less than 0.05 level of significance. The study also discovered that market factors, legal factor, financial factors, physical factors, economic factors, administrative factors, institutional factors and housing policy factors must be addressed to ensure a conducive environment for residential property investment. The bedrock of residential property investment performance is rooted location infrastructure, in order to have stable and steady returns it is therefore recommended that housing supportive facilities should be provided at lower cost to residential property investment in the selected areas of Kano. It is also recommended that estate surveyors and other real estate investors should liaise with government on challenges facing real estate sector as to reduce rate of risk in the market such as taxation risk, housing policy and institutional constraints.