AN EVALUATION OF FACTORS DRIVING PROPERTY INVESTMENT DECISIONS BY PRIVATE DEVELOPERS

(A CASE STUDY OF ABUJA)

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Author

Presented To

Department of Environmental Design

ABSTRACT
This study investigates the factors driving property investment decisions by private developers in Abuja. Theimpact of the economic activities and surging population influx in areas with high population growth and urbanization suffer from housing or property deficit due to unassessablity of driving factors that influence private investors? decision into property. The aim of the study is to assess the factors driving private developers? investment decisions with a view to enhancing property development activities in Abuja. The study investigated the reasons why private developers choose to invest in property,the economic and non economic and property related factors that impact on property investment decisions and also examined the property types developed by private developers in Abuja. It further examinedconstraints to property investment. The study population of Real Estate Developers Association of Nigeria (REDAN) in Abuja is 356; quantitative research was adopted for the study. The study made use of well structured questionnaire to collect expert opinion on the issue of interest. The data collected were analysed using the Relative Importance Index (RII) and mean. The study established that capital gain; long term wealth creation and financial security are the reasons why private investors choose to invest in property which were ranked first with Relative Importance Index (RII) of 0.87. The study also established that capital market (equity and debt) is the most influential economic factor that drives property investment (RII= 0.87). Performance of the building construction sector (RII=0.84) is the most significant non economic driver of investment into property. It is also found that mortgage repayment is the major constraint to property investment (RII=0.86). The study concludes that financial security, capital gain, long term wealth creationare thereasons why private investors choose to invest in property. It is also concludedthat capital market and performance of the building xiii construction sector are the major economic and non economic factors driving investment decision in property respectively .It is recommended that property investors should consider attributes likes workmanship quality, location dimension of land property category (detached, semi-detached) and neighborhood attractiveness significantly affect property values reason being that the value of a property is the key as properties with such attributes are likely to have their value period last longer than the properties with no such attributes.