PRICE CONCESSION ON AKURE RESIDENTIAL PROPERTY MARKET

Authors

  • ADEYEMO DELE ISAAC

DOI:

https://doi.org/10.3759/rtcet.v8i3.1439

Abstract

This research work examined the price concession on vacant land and developed residential property market in Akure, Nigeria. The data for the study was collected through structured questionnaire administered on the 20 Estate Surveying and Valuation practising firms in Akure as contained in the, 2018 register of the Heads of firms of the Nigerian Institution of Estate Surveyors and Valuers, Ondo State Branch. The records of the past sales transactions of the Estate Surveying and Valuation firms from 2013 to 2018 were sampled and the records revealed that only 131 properties had complete data for analysis purpose. The data collected were analysed using descriptive (frequency table and arithmetic mean) and inferential statistics (paired samples test). The result of the study revealed that among the vacant land, properties in the Transition area, peripheral area and the GRA were significant with t (23)=3.609, p = 0.00; t (35)=3.045, p = 0.004 and t (20)=2.351, p = 0.029 respectively. These results suggest that there is a significant difference between the list price and sale price of undeveloped land in the area with properties in the peripheral area having the highest concession in real term, followed by those in the transition area and then the GRA. The study also revealed that among the developed residential properties, those in the transition area are more significant {t (28)=5.339, p = 0.000} than those in the GRA {t (4)=1.928, p = 0.126}.. The test results above show a wide price difference in the zones especially among the developed properties and reveal the overpricing of properties in the transition area by the property owners. It also shows that undeveloped properties are sold close to their asking price than developed properties. The study therefore recommended that seeing that the properties are often sold at concession in Akure, property owners should be prepared to sell their properties at prices lower than the list price.

References

Knight, J.R. (2002). Listing Price, Time on the Market and Ultimate Selling Price: Causes and Effects of Listing Price Changes. Real Estate Economics, 30 (2), 213-237

Balchin, P.N., Bull, G.H. and Kieve, J.L. (1995). Urban Land Economics and Public Policy 5th Edition, Macmillan Press Ltd, London

Forgey, F.A., Rutherford, R.C. and Springer, T.M. (1996). Search and Liquidity in Single- Family Housing. Real Estate Economics, 24 (3), 273-292

McGreal, S.; Adair, A.; Brown, L. and Webb, J.R. (2009). Pricing and Time on the Market for Residential Properties in a major U.K. City. Journal of Real Estate Research, 31 (2), 209-233

Anglin, P.M., Rutherford, R.C. and Springer, T.M. (2003). The Trade-off between the Selling Price of Residential Properties and Time-on-the-Market: The impact of Price Setting. Journal of Real Estate Finance and Economics, 26 (1), 95-111

Yang, S. and Yavas, A. (1995). Bigger is Not Better: Brokerage and Time on the Market. Journal of Real Estate Research, 10 (1), 23-33

Anglin, P. (1997). Determinants of Buyer Search in a Housing Market. Real Estate Economics, 25, 567-589

Knight, J.R., Sirmans C.F., and Turnbull, G.K. (1998). List Price Information in Residential Appraisal and Underwriting. Journal of Real Estate Research, 15 (1-2), 59-66

Haurin D.R., Haurin J.L., Nadauld T. and Sanders A. (2006). List Prices, Sale Prices, and Marketing Time: An Application to U.S. Housing Markets. Working Paper Series 2006-22, Ohio State University, Charles A. Dice Centre for Research in Financial Economics.

Björklund, K., Dadzie, J. and Wilhelmsson, M. (2004). Offer price, Transaction Price and Time- on Market. Real Estate Economics Department: KTH Infrastructure, Royal Institute of Technology, Stockholm, Working Paper., 49

McGreal, S.; Adair, A.; Brown, L. and Webb, J.R. (2009). Pricing and Time on the Market for Residential Properties in a major U.K. City. Journal of Real Estate Research, 31 (2), 209-233

Carrillo P.E. (2010). To sell or not to sell: List price, Transaction price and Marketing time in the Housing Market. Applied Microeconomics Seminar, George Washington University, Washington D.C, September 2010

Rossini, P., Kupke, V., Kershaw, P. and McGreal, S. (2010). Time on Market Indicators for Adelaide, South Australia. 16th Pacific Rim Real Estate Society Conference, Wellington, New Zealand, January 2010

De Wit, E.R. and Van der Klaauw, B. (2010). Assymetric Information and List Price reductions in the Housing Market, Tinbergen Institute Discussion Paper, 2010-038/3

Cheng, P., Lin, Z and Liu, Y. (2009). Home Price, Time-on-Market, and Seller Heterogeneity Under Changing Market Conditions, Journal of Real Estate Finance and Economics 125-160

Díaz, A. and Jerez, B. (2009). House Prices, Sales and Time on the Market: A Search-Theoretic Framework, Working Paper 09-25 Departamento de Economía, Economic Series (15) Universidad Carlos III de Madrid

Asabere, P.K., and Huffman, F.E. (1993). Time on the Market, and the actual Sale Price of Homes. Journal of Real Estate Finance and Economics, 6, 167-174

Benjamin, J.D. and Chinloy, P.T. (2000). Pricing, Exposure and Residential Listing Strategies. Journal of Real Estate Research, 20 (1-2). 61-74

Merlo, A. and Ortalo-Magne, F. (2004). Bargaining over Residential Real Estate: Evidence from England. Journal of Urban Economics, 56,192-216.

Genesove, D. and Mayer, C.J. (1997). Equity and Time to Sale in the Real Estate Market, American Economic Review, 87, 255-269

Arnold, M.A. (1999). Search, Bargaining and Optimal Asking Prices. Real Estate Economics, 27, 453-482

Akinbamijo O. B. (2004). Environmental Health and Intra-Urban Disparities in Akure. PhD Thesis in the Department of Urban & Regional Planning, Federal University of Technology, Akure.

Downloads

Published

2018-12-19

Issue

Vol. 8 No. 3 (2018)

Section

Review Article

License

Declaration and Copyright Transfer Form

(to be completed by authors)

I/ We, the undersigned author(s) of the submitted manuscript, hereby declare, that the above manuscript which is submitted for publication in the STM Journals(s), is not published already in part or whole (except in the form of abstract) in any journal or magazine for private or public circulation, and, is not under consideration of publication elsewhere.

  • I/We will not withdraw the manuscript after 1 week of submission as I have read the Author Guidelines and will adhere to the guidelines.
  • I/We Author(s ) have niether given nor will give this manuscript elsewhere for publishing after submitting in STM Journal(s).
  • I/ We have read the original version of the manuscript and am/ are responsible for the thought contents embodied in it. The work dealt in the manuscript is my/ our own, and my/ our individual contribution to this work is significant enough to qualify for authorship.
  •  I/We also agree to the authorship of the article in the following order:

Author’s name                                    

 

1. ________________

2. ________________

3. ________________

4. ________________

 

We  Author(s) tick this box and would request you to consider it as our signature as we agree to the terms of this Copyright Notice, which will apply to this submission if and when it is published by this journal.