Nigerians have always clamoured for infrastructure not only in estates but in other locations.
Already, the decay and death of infrastructure in the country has reached crisis dimension and has become an albatross for the citizens that the only means of transportation for most people today is motorbikes and strong SUVs that can manaouvre potholes and gullies on most roads. Indeed infrastructure decay has made some properties to drop in price because not more people are interested in buying or renting apartments in those areas for fear of bad roads. The implication is unoccupied properties now litter several cities and towns around the country even whenmay people are out there looking for accommodation. This is why the housing deficit is continuously on the increase. The private developers are really not doing badly in the supply of the goods (houses) to the public. Although, under normal circumstances, government has the duty to provide the low cost housing to ameliorate the acute housing shortage living with the people. Nigerians experienced and enjoyed the low cost housing during the Shehu Shagari administration. The then governors like Alhaji Kayode Jakande in the Lagos State, Jim Ifeanyichukwu Nwobodo of the then Anambra State, the Dee Sam Mbakwe of the old Imo State, the Balarabe Musa just to mention this few, all provided what the current generation today can call Estate. That is government in action. These days, federal government is not interested in checking how the state governments expend money allocated to them. This is for fear that during the next election they may gang up against them.
Today, no part of the country has motorable road network and the people are keeping quiet. In the past, there was the rail to augment the shortages in motors and also to make the journey steady even though it may be slow. Of course, rail infrastructure generally lifts the value of property in a suburb. An instance is that suburbs with train stations have median house prices around 3.7 per cent higher than those without. Those living on the expressway and areas where there is good roads tend to pay higher than those living in remote areas. Experts’ analysis of major stations, indicate that these suburbs generally had higher capital growth rates than the 10 year average for the property built on the hinterland without roads. Train stations are often located within commercial hubs, and give people cheap, easy access to work and leisure. This is why most business people feel perturbed when they are doing their part to develop the cities with government not covering their own tracks. This is also why, when you want to achieve relatively strong growth on your investment or family home, it becomes best to buy your home near a station when rail systems are working and areas where there are good roads. Infrastructure and Economic Development Infrastructure contribute to economic development by increasing productivity and providing amenities which enhance the quality of life. The services generated as a result of an adequate infrastructure base will translate to an increase in aggregate output.m.
There is the need for government to harness development potential within the local government of the study area to create job opportunity so as to reduce precious time and resources spent on travel cost to workplaces. In addition, to sustain property market in the study area, it is suggested that prospective property developers should take cognizance of locational, structural and neighbourhood factors that significantly affect property value in the study area as this would help the marketability and viability of the investment. This study therefore provides a glance at the ensuing market forces and dynamics in the study area. It provides first hand information for property investors, advisers, planners, builders, architects as well as the government. It is also a guide for global interest in the Nigeria particularly Lagos property market. It does not matter where in the suburb you buy or build your house. What you should bother yourself about is whether there is road to take you out and bring you in whenever you want to. Being in a suburb with a train station is a plus for house values. But in a simple analysis, can we say that property right next to a station have higher or lower growth rates and rental yields to those a few kilometres away?
Investment in infrastructure services, such as transportation (roads), electricity and water are intermediate inputs to production. Infrastructure services tend to raise productivity of other factors. Infrastructure is often termed the “unpaid factor of production”. Investment in infrastructure in a given location often attracts additional flow of resources. Both effects, contribute to economic growth by stimulating aggregate supply as well as demand. However, these contributions on aggregate output, take time for the benefits to be realized. In a paper by Canning and Fay (1993), it was concluded that developing countries showed a high rate of return on transport infrastructure comparable to those of developed countries. Conclusive evidence linked increased output to increased investment in transport infrastructure, but little evidence with that link being immediate. From the foregoing, it was concluded that infrastructure was not to be considered a factor of production, but rather a condition for higher rates of economic growth. From the above, the outputs of infrastructure to economic growth are wide and far reaching. Far reaching that their impacts should never be underestimated. Ability to foster infrastructure development is best tackled at a strategic level from where the necessary energy lies to drive its implementation. Strategic planning combined with a strong political will needs the right procurement approach to achieve long term results. Public- Private Partnerships (PPP), will not only meet such goals but have been found to accelerate them. PPP allows governments to free up fiscal funds for use in other pressing areas.
Property is a multi-dimensional product and the number and nature of factors that influence its value are equally of different kinds. Property and land values tend to increase in areas with expanding transportation networks, and increase less rapidly in areas without such improvements. Rapid and continued rise in housing and land prices are expected in cities with transportation improvements and rapid economic and population growth. The value of access is capitalized into the land value and access is measured through market participants’ willingness to pay. Essentially, this view suggests that accessibility measures may be inferred from land prices. The relationship among accessibility, property values and land use patterns have been the pre-occupation of earliest theorists with indication that travel costs were traded off against property rents and population densities from Central Business District (CBD) to suburbs of a mono- centric city. Real estate has no value if it has no utility, if it is not scarce and if it is not effectively demanded. Real estate has significance only as it satisfies man’s needs and desires.
It is this man’s collective desire for property that gives rise to value. Thus, the ability of a property to satisfy man’s needs and desires together with its degree of scarcity and utility compared with others makes man to ascribe value to it. Property value, therefore, according to Millington is the money obtainable from a person(s) willingness and ability to purchase property when it is offered for sale by a willing seller, allowing for reasonable time for negotiation and with the full knowledge of the nature and uses which the property is capable of being put.
Quality of the environment is also another factor that affects the values of land. Land value does not only depend on the physical characteristics of a building but also the environment that surrounds the building. Developments of various transportation modes have become pivotal to physical and economic developments. Access to major roads provides relative advantages to residential users. Modern business, industries, trades and general activities depend on transport and transport infrastructures, with movement of goods and services from place to place becoming vital and inseparable aspects of global and urban economic survival. Stated that the factors affecting property values are generally classified into external and internal factors. This study therefore examines the effect of these factors such as accessibility measured in terms of travel distance and cost, neighbourhood, structural (property) and locational characteristics on residential property value in Magodo, Lagos State. Well, relatively no because the site of the property in terms of location, whether in highbrow area or not can determine how the property is rated. Houses on the express could be lowly rated or not attractive because the population of people around the area does not support massive investment. So houses built along the express by fishermen and or hunters or those on shifting cultivation may not attract any high rate because those living there do so as make shift. However, because there is expressway along the place that can support civil servants to and fro their offices, those owning land there could develop some blocks for rent. Although, majority of the residents in the area have their workplaces in relatively distant locations. The distance travel and cost of getting there is not a significant factor that affect property value contrary to the propositions of rent theory. This invariably implies that residents are indirectly paying more to live in the area. It could be further discovered that proximity to the highway that connect Lagos State to other parts of Nigeria, number and size of bedrooms, conveniences, good road and drainages as well as security are the leading factors affecting property values in the area. Despite the many potentials for industrial development in the Kosofe local government in Lagos for instance, it is not clear or mentioned that these potentials are being fully harnessed as there are no immediate central or sectoral business district in the area. Real estate is a heterogeneous good that is comprised of a bundle of unique characteristics reflecting not only its location, but equally affected by other amenities such as the quality of neighbourhood and infrastructure. Ge and Du in 2007 opined that property value is an essential aspect of property markets worldwide and determined by a variety of factors. Therefore the determination of those factors is a significant part of property valuation.