The Impact Of Accessibility On Residential Property Values

Project and Seminar Material for Estate Management

Abstract

The aim of this study is to examine the impact of accessibility on residential property value in New Haven Enugu metropolis. The population of the study is comprised of all the residential properties in the area including registered Estate Surveyors and Valuers, landlords and tenants of these residential properties. The study is a survey research because I want to find out information directly from the landlords, tenants and the estate surveyors with regard to factors of accessibility and how they enhance the value of properties. A general visual inspection survey was made in this study area. The results revealed that accessibility factors such as good drainage system, good network, communication, nearness to school, church and market and electricity have significant impact on property values, even the name alone New Haven has an impact on the property values because it was among the first areas that was developed by the whites when they came to New Haven in the time of coal mining. However, this study has drawn attention to the disposition of the Estates and Valetors, Real Estate Developers and also investors with regards to factors for accessibility. The findings of this research will be of immense value to other researchers, fellow students especially those in estate management department for it will not only help to sharpen their intellect but also provide the basis and rationale for further studies. This study will be beneficial to town planners in the planning and allocation of land use in an urban area.

Chapter One

Introduction

1.1 Background of the Study

At the foot of the Milliken Hill ridges lies Enugu, the then Capital of east-central state of Nigeria Enugu, which literally means ‘’hill top’, derives its name from its position among the Udi hills on an attitude of 689.8feet above sea level, area of 28.27 square meters with population of 722,664 according to 2006 census (Wikipedia, 2016) and close to two million according to 2015 estimates (Wikipedia, 2016).

According to ministry of information Enugu state (2002), Enugu owes its existence to the discovery of a rich seam of coal at east of Ngwo village in 1909 by a geological exploration team led by a British Mining Engineer W. J.Leck arrived in Enugu with a group of labourers from Onitsha led by Mr Alfred Inoma.W.J.Leck and his white assistants made their first home in temporary mud house on top of the Milliken Hill ridge in what is now known as the Hilltop, while the indigenous labourers established their own settlement on a super 200feet up the ridge and was called Alfred Inoma.

From Enugu, the British Administration was able to spread its influence over the southern province of Nigeria. The Colonial past of Enugu is today evidenced by the Georgian building types and meandering narrow roads within the residential area originally reserved from the whites, an area which is today called the Government (GRA).From being the Capital of the Southern provinces, Enugu became the Capital of the Eastern Region(divided into nine states),the Capital of now defunct Federal Republic of Biafra, thereafter, the Capital of East Central State, Anambra State(Old)Enugu State and now the Capital of the present Enugu State through a process of state creation and diffusion of administrative authority (Wikipendia,2016).

However the construction of railway line to link the Udi coal fields with the coast at Port Harcourt for the purpose of export started from 1914 and was completed in 1916.The mine and the railway offered employment to thousands of people and attracted many petty traders who provided the need of the workers (Wikipedia, 2016).This gave rise to populations in the young town and the development of new layout became a pressing necessity. Therefore, as the coal mine attracted more workers, the settlement on the southern side of Ogbete stream was established for indigenous workers and in 1923 the railway authorities began to build permanent quarters for their workers at China town. Enugu has well defined pattern of growth. It comprises a number of residential layouts. Each new residential layout was developed as a solution to the problem of urban population growth (Ezenwa, 2003).As Enugu grew in importance as an administrative, residential and commercial town, many people were attracted to the flourishing city. In 1960’s New Haven was one of the areas mapped out (Wikipedia, 2016).More so, New Haven was one of the areas that was mapped out. Moreso, New Haven is characterised by infrastructural facilities which makes the area accessible and beautiful blocks of flats, modernconveniences and strong attractions for most civil servants and middle class families who preferred to live near their places of work. Due to this urban development in the area, the demand for residential property increased and how this availability of accessibility factors affects the rental value in New Haven is being examined.

However, accessibility is the ease and convenience of entering a property by tenants, owners, customers or any other users. Typically refers to foot traffic or automobile traffic, but could also refer to airplane traffic in subdivisions with accompanying landing strips for owners. A lack of accessibility typically results in a lower property value (Business Dictionary).

Accessibility is the main issue that determines profitability and utility (Maluze, 2010).The better the accessibility of a place, the lower the transportation costs in terms of distance, time and convenience. The higher the comparative advantage of a place and the higher the demand for properties located in those areas.

1.2 Statement of the Problem

Before now, New Haven suffered from lack of basic infrastructure and amenities that makes for an urban area. At that time, the area experienced lack of good road network, poor drainage system, lack of easy access to other areas, lack of adequate communication network and accessibility, better communication system and establishment of different education facilities. However, the new development that came into the area brought about increase in the demand for residential properties. However, this demand which does not correspond with the supply of residential accommodation and thus has led to continues increase in the rental value of those properties.

The extent to which these accessibility factors affects the property value within New Haven is the focus on this research.

1.3 Aim and Objectives of the Study

The aim of this study is to examine the impact of accessibility on residential property values in New Haven Enugu with the following Objectives:-

To identify the infrastructural facilities that makes New Haven accessible when compared to other layout or area.
To determine the rental value of residential properties in the study area.
To determine the Capital Value of residential properties in the study area.
To evaluate the impact of accessibility factors on residential property value in different areas of New Haven Enugu.

1.4 Research Questions

These research questions have been put forward for the purpose of this study. They are as follows:-

What are the infrastructural facilities that make New Haven accessible when compared to other layout or area?
What is the rental value of residential properties in the study area?
What is the capital value of residential properties in the study area?
What is the impact of accessibility factors on residential property value in different areas of New Haven Enugu?

1.5 Hypothesis Formulation

The hypothesis postulated for this study are as follows:-

H0 :- Accessibility has no significant impact on residential property values in New Haven Enugu.

1.6 Significance of the Study

The significance of this study lies in addressing the relevance of accessibility in enhancing the values of a property to investors and also to real estate developers in making right choice of land use with respect to location and also to maximize high rate of return. This study will be beneficial to town planners in the planning and allocation of land use in an urban area. The study will be of immense value to other researchers, fellow students especially those in estate management department for it will not only help to sharpen their intellect but it will also provide the basis and rationale for further studies.

Furthermore it will enlighten the government on the importance of accessibility as one of the factors which enhances the development of urban cities. Furthermore, the citizen of Enugu urban will benefit from this research work greatly because they will now understand that accessibility factors help in the promotion of an area. It will also help the estate surveyors and valuers in carrying out valuation for rental purposes and also to occupants on what utility to expect in return from rent paid and also to enable them negotiate for reasonable rent.

1.7 Scope of Study

This study will focus on the impact of accessibility on residential property value in New Haven Enugu metropolis. Based on the limited time given for the study, the impact of accessibility on residential property value in New Haven will be looked at and it will include some of these selected properties such as tenement buildings, block of flats, bungalow and duplexes. Enugu shares borders with Abia state and Imo state in the south, Ebonyi state to the east, Benue state to the Northeast, Kogi state to the Northwest and Anambra state to west (Enugu master plan,1978). Enugu State is an inland state in south eastern Nigeria. Its capital is Enugu where the state derives its name.
It shares boundaries with Anambra on the West, Abia State on the South, Kogi on the North while Benue and Ebonyi on the East. Enugu and Nsukka are its major towns. Enugu was the headquarters of the former East Central State and Eastern Nigeria. Enugu is the capital of Enugu State in Nigeria. It is located in the southeastern area of Nigeria and is largely populated by members of the Igbo, an ethnic group in Nigeria.

Chapter Five

Summary of Findings, Recommendation and Conclusion

5.1 Summary of Findings

In the course of this research work, “The impact of accessibility on Residential property value in New Haven Layout Enugu” a number of discoveries and findings were made.

The study revealed that accessibility factors such as good drainage system, good network, communication, nearness to school, church and market and electricity have significant impact on property values, even the name alone New Haven has an impact on the property values because it was among the first areas that was developed by the whites when they came to Enugu first during the time of coal mining.
During the research it was found out that the population is medium notwithstanding the high rental value of residential properties in the area was expecting to see many vacant residential properties.
During the research I found out that in the study area it is easy to access other parts of the states (CBD).
During the research it was observed that many of the properties found in New Haven Layout are for residential purpose and with the effect of development commercial use started taking place.
Lastly I observed that the rental and capital value of properties in the study area was low, but not until after accessibility was introduce.

5.2 Recommendation

In view of the findings of this study and in order to enhance the impact of Accessibility on Residential Property Value, the following are recommended;

Further studies should be conducted on the impact of accessibility on the residential property value in Enugu Urban to always find out the level of value at as the time the research was conducted and at as the time the development has taken place.
More access should be created to other layouts for more attraction of investors in other to ease the high demand for residential accommodation in New Haven.
Effort should be made by government in maintaining the infrastructural facilities especially good road network within the other layouts in order to enhance the accessibility by drawing from the situation in New Haven Enugu.
Valuers should consider the predominant factors that impact the property value when carrying out valuation using market approach.

5.3 Conclusion

Several studies have postulated that the accessibility of a location affect the values of properties in that location. However, this research has drawn attention to the disposition of the Estate Surveyors and Valuers, Real estate developers and also investors with regard to factors of accessibility and how they enhance the value of properties.

Therefore, this study has shown that accessibility has significant impact on residential property value in New Haven Layout, Enugu and its environment. It has enlightened the tenants on the important of living in an area with good infrastructural facilities.

Valuers should be able to differentiate from general accessibility which is outside the immediate neighbourhood of a property and special accessibility which has to do with accessibility within the neighbourhood of a property.
The important of accessibility in an urban area cannot be overemphasized and such planners should ensure that cities are designed in such a manner as to have easy movement from one point to another