EXAMINATION OF FACTORS AFFECTING THE PURCHASE DECISION OF

INVESTORS IN THE RESIDENTIAL PROPERTY MARKET

IN CALABAR, NIGERIA

SEMINAR BY

NAME:
REG NO:

SUPERVISED BY:

SUBMITTED TO

THE DEPARTMENT OF ESTATE MANAGEMENT

FACULTY OF ENVIRONMENTAL SCIENCES
UNIVERSITY OF CROSS RIVER STATE (UNICROSS), CALABAR

IN PARTIAL FULFILMENT FOR THE AWARD OF THE BACHELOR OF

TECHNOLOGY (B.TECH) IN ESTATE MANAGEMENT

AUGUST, 2023

i
 CERTIFICATION

This is to certify that this research work titled “Examination of factors affecting the purchase
decision of investors in the residential property market in Calabar, Nigeria”was carried out
by Etim, Victoria Ubon with Registration Number: 17/ESV/111, of the Department of Estate
Management, University of Cross River State, under the supervision of Esv. Okoro

_________________________ __________________
Esv. Regina Abam Date
(Project Supervisor)

_________________________ __________________
Esv. Regina Abam Date
(Head of Department)

ii
 DEDICATION

This research work is dedicated to the Almighty God

iii
 ACKNOWLEDGEMENT
With heart fill with gratitude, I want to thank the Almighty God for his love, care,
protection and more importantly for provision throughout my stay in school and also for the
strength he has bestowed upon me to complete this academic journey.
I want to specially appreciate my project supervisor Esv. Okon Ukam for his Patience,
fatherly advise and guidance during the period of writing this research work despite his busy
schedules. I will not fail to acknowledge the Dean Faculty of Environmental science,
My hearty appreciation to my beloved parents Mr/Mrs. Ubon Etim Eyo, My Lovely
Siblings Stella, Beatrice, Oto-Obong, Sifon-Obong and Christiana Ubon Etim for their love,
care, prayers and support throughout my stay in school.
I will not forget my friends; Jeremiah Sampson, Silver Etura, David Lucas Udoh, Uffia
Inyang and many others who have contributed in one way or another, I say may God bless you
all for your friendship and support.

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 TABLE OF CONTENT

Title page
Certification - - - - - - - - - i
Dedication - - - - - - - - - - ii
Acknowledgement - - - - - - - - - iii
Table of Contents - - - - - - - - - iv
Abstract - - - - - - - - - - v

CHAPTER ONE: INTRODUCTION

1.1 Background to the study - - - - - - - 1
1.2 Statement of the problem - - - - - - - 2
1.3 Aim and Objectives - - - - - - - - 3
1.4 Research Questions - - - - - - - - 4
1.5 Research Hypotheses - - - - - - - 4
1.6 Significance of Study - - - - - - - 5
1.7 Study Area - - - - - - - - - 5
1.7.1 Area and Geographical Location - - - - - - 5
1.7.2 Population - - - - - - - - - 6
1.7.3 Vegetation - - - - - - - - - 6
1.7.4 Climate and Temperature - - - - - - - 6
1.7.5 Historical/ Cultural Background - - - - - - 6
1.7.6 Traditional and Socio-economic Activities - - - - - 7
1.7.7 Educational Activities - - - - - - - 7
1.8 Scope of the study - - - - - - - - 8
1.8 Limitation of the study - - - - - - - 8

CHAPTER TWO: CONCEPTUAL FRAMEWORK AND LITERATURE REVIEW

2.0 Conceptual Framework - - - - - - - 9
2.1 Purchase decision of investors - - - - - - 9
2.1.1 Investors decision in acquisition of property - - - - - 10
2.1.2 Factors affecting investors decision in property acquisition - - - 11
2.2 Concept and meaning of residential properties - - - - 14
2.2.1 Features of residential properties - - - - - - 14
2.2.2 Residential Property market - - - - - - - 16
2.2.3 Concept of Demand and Supply - - - - - - 16
2.2.4 Demand and supply of residential properties - - - - - 17
2.2.5 Investments in residential property markets - - - - 17
2.2.6 Investor performance measurement of various locations - - - 18
2.2.7 Investors dependence on valuers, property brokers and agents - - 20
2.2.8 Measurement of real estate returns and risk at different locations - - 21

CHAPTER THREE: METHODOLOGY

3.1 Research Design - - - - - - - - 22
3.2 Study Area - - - - - - - - - 22

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3.3 Population of Study - - - - - - - - 23
3.4 Sample Size and Sampling Technique - - - - - 23
3.5 Sources of Data - - - - - - - - 24
3.6 Instrument of Data Collection - - - - - - 25
3.7 Validity and Research Instrument - - - - - - 25
3.7.1 Validity of instrument - - - - - - - 25
3.8 Method of Data Presentation and Analysis - - - - - 25

References

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 CHAPTER ONE
INTRODUCTION

1.1 Background to the study

Residential properties serve as one of man’s most basic need, which provides peace and
comfortable space for a family. As a developing nation, Nigeria is involved with various
emerging innovations, particularly in the residual sector. Various new forms and feasible
destination are involved in these innovations. Despite the diversity in housing choice in terms of
size, category, location, design, cost, and materials (Abdullah and Arshad,2012), it remains a
challenging process. Residential property choice is also associated with some elements
influencing the decision-making for house purchase, which varies for each individual.
Residential properties are multi-dimensional products and the number and nature of
factors that influence its value and purchase are equally of different kinds (Musa, Yusoff and
Zahari, 2015). Investment in residential properties 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 investors willingness to pay for
such properties. Essentially, this view suggests that accessibility measures may be inferred from
land prices and other essential factors. Quality of the environment is also another factor that
affects the choices of investors on residential properties. These factorsdoes not only depend on
the physical characteristics of a buildings but also the environment that surrounds the building.
Developments of various transportation modes have become pivotal to physical and economic
developments (Oloke, 2013). 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. Bello (2018) stated that the
factors affecting residential property values are generally classified into external and internal
factors.
In the residential property market, housing choice among buyers is essential due to its
function in predicting housing demand, which offers indirect assistance for the government to
stabilise housing policies and further promote house ownership (Abdullah and Arshad, 2012).
Essentially, the comprehension of housing preference is crucial for the buyers’ decision-making,
particularly first-time buyers (Khan et al., 2017). A study by Reid (2013) recorded various
1
elements influencing housing preferences, namely the relative price of ownership over rent,
fortune, salary, credit constraints, destination, household features, house category, cost, and
distance from service and product facilities, accessibility, and open space. Other elements are
convenient to access to public transport, proximity to school and commercial space.
Accordingly, Zyed et al (2016) recorded other factors influencing residential property purchase
to include house cost, household salary, and housing selection. Meanwhile, Jayantha and Ming
(2016) determined other elements, including security, construction standard, and design features.
Majid (2010) on his part found that the developer’s reputation is another aspect taken into
account in property purchase in Nigeria.
Essentially, purchase decision on housing property is a conclusion after consideration of
buying a house or residential property. The decision can be considered as a resolution after
several research activities or processes in line with the changes in the lifestyle of the population,
which affect the determinant of housing property purchase decision and its impact on housing
demand (Ibemet. al., 2015). In offering affordability and quality in residential properties, the
private developers and the government should identify the primary elements leading to the house
purchase, ensuring the successful operation of projects, and satisfying the homeowners’ long-
term goals for living or investment. Moreover, housing property purchase decision may refer to
the purchase of shelter, while the house fulfils the buyers’ needs and desires (Zubek, 2015).
Investors of homebuyers would require a comprehensive information regarding the aim of
housing property purchase and determine the associated elements before reaching the purchase
decision (Thaker and Sakaran, 2016). An improved understanding of individuals’ selection of
residential property is crucial. This is similar to the importance of understanding the factors of
investors’ understanding of the residence adequacy and satisfaction in the circumstance of
properties (Mariadaset. al., 2019).

1.2 Statement of the problem

The rapid rate of urbanization as well as the phenomenal increase in population in the big
cities of Nigeria has placed high demand on residential properties and other social services such
that demand has overcome supply. The result is the increasing inadequacy of housing both
qualitatively and quantitatively. Most of the residential properties in Calabar metropolis
(especially within Calabar South) are built with inferior materials as observed in places like
Anantigha, Edibe Edibe, Ewa Henshaw, Ibesikpo, Mbukpa, Edgerly, Ekpo-Abasi and so on.
Household facilities in Jebs area are even worse. Latrine toilets and outside bath sheds are
common and visible almost everywhere. Crime rate in these areas are high all year round.
2
Furthermore, most of these areas have existed for decades and are relatively older than what
should constitute an average residential area. Majority of the houses notably lacks basic
amenities like kitchen, toilet and bathrooms. The inferiority of the materials used, where such
facilities exist is unimaginable. The availability of such facilities is short lived, and so reduced
by lack of maintenance of the houses. This has resulted in the deterioration of these residential
properties. Consequently, Razak et. al., (2013) has pointed out that, amongst others, these short
comings pose many environmental contingencies that may affect both the overall health status of
her inhabitants.
With the present increase in human populations, it becomes pertinent that investments in
residential property markets will be on the rise. Thus, real estate developers and investors while
marketing the residential products, tries to identify areas where residential properties are
equipped with state of the art facilities and other comforting requirements to potential occupants,
as well as aiming to rectify the defects existing in residential areas as it affects residential
properties. At the same time, theygive due regard to the factors that are supposed to significantly
influence the purchase decision of theirprospective customers in respect of new housing.
Therefore, in order to analyze such issues and hence to arrive at meaningful solutions
thereof, it becomes pertinent to review the factors affecting the purchase decision of investors in
the residential property market in Calabar, Nigeria.

1.3 Aim and Objectives

The aim of this study is to examine the factors affecting the purchase decision of
investors in the residential property market in Calabar, Nigeria. To achieve this aim, the
following Objectives are undertaken:
i. To evaluate the process of residential property acquisition in the study area

ii. To examine the factors affecting the purchase decision of investors in the residential

property market

iii. To identify the socio-economic variables affecting the purchase decision of investors

in the residential property market

1.4 Research Questions

The following questions were formulated to help generate data to solve the problem of
the study.
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i. What are the processes of residential property acquisition in the study area?

ii. What are the factors affecting the purchase decision of investors in the residential

property market?

iii. What are the socio-economic variables affecting the purchase decision of investors in

the residential property market?

1.5 Research Hypotheses

The following hypotheses were postulated to strengthen the research questions.
H01: There is no significant relationship between process of residential property acquisition
and the purchase of residential properties in Calabar metropolis, Cross River State.
H02: Ranking of factors affecting the purchase decision of investors in the residential

property market does not significantly influence the purchase decision of investors on

residential propertiesinCalabar metropolis, Cross River State.

H03: There is no significant difference between the socio-economic variables affecting the

purchase decision of investors in the residential property market and the purchase of

residential properties by investors within the study area.

1.6 Significance of Study

The study is deemed significant as factors promoting investors decision in the acquisition
of residential properties within the Calabar metropolis will be identified and made known to
potential real estate investors as well as the general public.
Also, the study is poised to explain the challenges which may be encountered during the
process of investing in residential properties within metropolis of Calabar, taking into
cognizance the fact that Calabar metropolis comprises of different traditional belief systems and
rites, from the Efiks, the quas, the Efuts and partly Ejaghams, whose mode of landed business
transaction differs based on their belief.
Furthermore, the Estate Surveying and Valuation profession will also benefit, from the
study as the research findings is expected to help improve investors level of investment in real
estate sector which will in turn create more job opportunities for the profession.

4
 Lastly, the research work will be of immense benefit to future researchers in the field of
Estate Management as there is dearth of data available in this area. The research work will
therefore add to few available literatures in the subject matter.

1.7 Study Area

The study area is defined in terms of the underlisted units.

1.7.1 Area and Geographical Location

Calabar is the capital city of Cross River State, Nigeria. It was originally named Akwa
Akpa, in the Efik language.The city is adjacent to the Calabar and Great Kwa rivers and creeks
of the Cross River (from its inland delta).Calabar is often described as the tourism capital of
Nigeria, especially due to several initiatives implemented during the administration of Donald
Duke as governor of Cross River State (1999–2007), which made the city the cleanest and most
environmentally friendly city in Nigeria.[4] Administratively, the city is divided into Calabar
Municipal and Calabar South Local Government Areas. It has an area of 406 square kilometres
(157 sq mi). Geographically, the metropolis lies between Longitudes 8˚18'00"E to 8˚24'00"E and
Latitudes 4˚54'00"N to 5˚04'00"N and is located in the southern part of Cross River State.

1.7.2 Population
Calabar people are mainly people from the old Calabar province – Calabar South,
Calabar Municipality, Akpabuyo, Bakassi, Biase, Odukpani and Akamkpa, but as commonly
used in Nigeria, the term Calabar people could also refer to the indigenes of Greater Calabar as
well as the people of the original South Eastern State of Nigeria who are at present the people
of Akwa Ibom State and Cross River State. Calabar comprising of Calaba south and Calabar
municipality Local Government Areas has a total population of about657,022 persons (NBS,
2023).

1.7.3 Vegetation
Calabar has saltwater swamps, mangrove forests, oil palms, and dense tropical rain
forest. The city has a significant portion of the state’s forest resources and supplies a sizable
amount of her industrial woods for export and domestic markets.

1.7.4 Climate and Temperature

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 Under Köppen's climate classification, Calabar features a tropical monsoon
climate (Köppen: Am) amidst a lengthy wet season spanning ten months and a short dry
season covering the remaining two months. The harmattan, which significantly influences
weather in West Africa, is noticeably less pronounced in the city. Temperatures are relatively
constant throughout the year, with average high temperatures usually ranging from 25 to 28
degrees Celsius. There is also little variance between daytime and nighttime temperature, as
temperatures at night are typically only a few degrees lower than the daytime high temperature.
Calabar averages just over 3,000 millimetres (120 in) of precipitation annually.
1.7.5 Historical/ Cultural Background
Calabar was the name given by the Portuguese discoverers from the 15th century to the
tribes on this part of the Guinea coast at the time of their arrival, when the present inhabitants in
the district were the Quas. It was not till the early part of the 18th century that the Efik people,
owing to civil war with their kindred and the Ibibio, migrated from the neighborhood of
the Niger River to the shores of the Calabar.On the 10th of September 1884, Queen
Victoria signed a treaty of protection with the king and chiefs of Akwa Akpa, known
to Europeans as Old Calabar—then the official title to distinguish it from New Calabar to the
east. This enabled the United Kingdom to exercise control over the entire territory around
Calabar, including Bakassi. Calabar was the headquarter of the European administration in
the Niger Delta until 1906 when the seat of government was moved to Lagos.

1.7.6 Traditional and Socio-economic Activities

Calabar people(the Efiks) are rich in cultural heritage. The people have many age-long
traditional institutions like Ekpe, Obon, Akata, Eka-Ebituand the age-grade system.Ibeno people
are basically of Ekid and Oron origin. The common dialect of Calabar people is Efik language.
Socio-economically, food crops including yams, cassava, rice, and corn (maize)
are cultivated. Deep-sea fishing and shrimping along the coast are also important. Palm oil and
kernels, timber, cocoa, and rubber are exported from Calabar, the state capital and a major
seaport. Industries produce cement, palm oil, asbestos roofing sheets and pipes, and baking
flour. Rivers are the principal means of inland transport. Calabar is a centre for trade especially
on the coastland as well as in the inland, where the famous watt market serves as a hub for major
trading activities.

1.7.7 Educational Activities

6
 Calabar has long been an educational centre. Its first church school, established by Hope
Waddell of the Free Church of Scotland in 1846, helped influence the Ekpe secret society to
pass a law (1850) prohibiting human sacrifice. It also has numerous tertiary institutions such as
the University of Calabar (established in 1975), the University of Cross River State (2002), a
college of technology, a teacher-training college, and numerous secondary schools are located in
Calabar.

1.8 Scope of the study

This study covers Calabar metropolis which is the administrative head of Cross River
State. The metropolis is an emergence of two local government areas which are Calabar
municipality and Calabar south local government areas. The study seeks to examine the factors
affecting the purchase decision of investors in the residential property marketwithin the Calabar
metropolis and how legally a residential property can be acquired for housing development in
line with the due processes. Factors such as environmental factors, neighborhood factors,
demographic factors, socio-cultural factors, financial factors, educational factors amongst others
and how it determines the purchase decision of investors willing to invest in residential
properties shall be covered in the study.

1.9 Limitation of the study

The problem of time and finances, as well as other limitations such as problems of
having to manage class work with the research work as well as the problem of gathering enough
materials for the study may constitute a limiting factor to the study.

7
Fig. 1.1: Map of Calabar Metropolis showing Calabar municipality and Calabar
South
Source:Cross River Geographic Information Agency (CRGIA), 2023

8
 CHAPTER TWO
CONCEPTUAL FRAMEWORK AND LITERATURE REVIEW

2.0 Conceptual Framework

This chapter is concerned with the review of relevant literatures and basic concepts that
are specific to the study.The conceptual framework for the study is presented under the
following headings.

2.1 Purchase decision of investors

One of the important aspects of financial management is proper decision-making in
respect of investment of funds. Successful operation of any real estate developmental project
depends upon the investment of resources in such a way as to bring in benefits or best possible
returns from such investment(s). An investment can be simply defined as expenditure in cash or
its equivalent during one or more time periods in anticipation of enjoying a net inflow of cash or
its equivalent in some future time period or periods (Monique and Raf; 2010). Since resources
are limited, a choice has to be made among the various investment proposals by evaluating their
comparative merits and making decisions on the viability of such investment. This would
facilitate the identification of relatively superior proposals keeping in mind the limited available
resources (Hong, 2010).
Investors prefer residential property investment because of certain characteristics, which
distinguish it from other forms of investment media. Rehm, Chen and Filippova (2018)
identified these as the uniqueness of each parcel of real estate, the immobility of real property
and the very long or permanent life of improvement to the land. The other features that make
real estate investment more attractive than other types of investment are its liquidity and a hedge
against inflationary erosion of purchasing power (2019). Residential property development for
investment purposes involves taking risk by the investor(s). Such project starts with an available
opportunity to construct a new building in which people can live, work, shop etc. This
opportunity has to be developed from an idea into something real. At the moment a real estate
developer takes a development opportunity, it has to manage risks pertaining to the acquisition
of land, permits, the design and construction process, and of course the lease and sale of the
completed real estate developmental project. Since risk is involved vis-à-vis alternative options,
the investors have to make an informed decision before committing investment funds to any real
estate developmental project.

9
2.1.1 Investors decision in acquisition of property
Investment has been defined as the sacrifice of something now for the prospect of later
benefits (Farrell, 2014). It could also be seen as the act of laying out money now in return for a
future financial reward. The reward may be in the form of an income flow or by the receipt of a
single capital sum or combination of both. The return may be or may not be a guaranteed one. A
rational investor is expected to maximize returns whilst minimizing risk. Concern for higher
returns and lower risks are two important investment considerations that broadly guide
investment decisions. In view of the vital roles played by returns and risks in investment
outcome, investment decision process usually involves a trade-off between risk and return
(Chandra, 2008). Therefore, investment decisions aim at stiking the efficient frontier which
provides the best risk-return ratio from an investment portfolio.
In the investment market, investors are usually faced with the numerous alternative
investments where funds could be injected. These include stock and shares, bonds, unit frusts,
bank deposit and landed property. The investment behaviour and the management skills required
differ from one investment type to another. This diversity creates the problem of choice which
according to Hargitay and Yu (1993) is one of the fundamental problems in making investment
decisions. Investors often have to choose from myriad of investment opportunities that differ not
only in the needed capital outlay, but also in the timing and the amount ofexpected future
income flows and the probability associated with them. Investors are expected to take into
consideration the characteristics of the various assets and the linkages among them (Hoesli &
MacGregor, 2020) since investment funds will only flow to the sector that promise the most
attractive return in the light of the expected risks and returns trade-off.
A stock market is a place where stocks, bonds, or other securities are bought and sold.
Individuals and corporate bodies are the investing entities that operate in stock markets for
profits. According to Graham (2009), prices of stocks in the market are determined by the
financial success of Business Corporation (Business Fundamentals) and the overall demand for
the corporation's stock (Market Technical Analysis). With the arrangement in the above
highlighted facility, stock market in every economy is the trading ground on which the capital
market operates.Property market is a set of submarkets where property rights are traded. In this
form of market, unlike other forms of markets such as the Stock Exchange Market, it has no
central dealing spot but is peculiar to geographical location. It could also be a system of
transaction between landowners, land users and estate agents. It could also be a framework or
medium where fransactions in tangible asset like land, buildings are made. However, it is
important to note that the market is not fixed to a particular location thus; fransaction in it can
10
take place anywhere. Property markets besides being categorised based on local geographical
location, are also segmented into commercial property markets, residential property markets,
industrial property markets and agricultural property markets. Commercial property market is
said to be the most intensively developed and capitalised (Dugeri, 2011 . The implication of the
foregoing is that investors have to rely on a set of criteria to guide investment decisions. It is
important that every investment criteria should be established through empirical study of this
nature; as use of research investnent decision criteria promotes the selection of the best
investment option from what is available in a particular market. Success in this regard mostly
depends on finding strategically appropriate investment opportunities and being able to
accurately forecast their past performance. Such forecasting must also consider the performance
of the investment media relative to other assets and the different types of investment assets
(Hargitay & Yu, 1993; Hwa, 2002). More so, diversification in investnent opportunities in recent
decades has eventually created the problem of choice which according to Hargitay and Yu
(1993) is one of the fundamental problems of investment decision making. Direct property
investnent requires a great deal of time commitment particularly in its management while stock
investment requires a passive management due to the fact that unlike direct property investment,
it does not require maintenance and other management functions. Because of this, investors are
left to grapple with establishing the performance of the various investments.

2.1.2 Factors affecting investors decision in property acquisition

i. Demographic Factor
Essentially, a demographic factor impacts residents’ selection (Hurtubiaet al., 2010).
According to Jayantha and Lau (2016), the demographic background of the buyers, including
income level, age, and marital status could influence the decision on property purchase. Lutfi
(2010) stated that individuals of 29 years old and younger have a lower possibility of purchasing
real estate as they would not be able to be financially stable. Furthermore, Kahn (2005)
identified country or ethnicity as a socio-economic element, which could be distinguished
through the nation and skin colour. Every ethnic group in Nigeria consists of diverse cultures
and points of view related to house purchase (San, 2016). Provided that education represents
lifestyle buyers, higher academic level is known as the primary factor of the housing system
(Barlow and Ozaki, 2003). Hurtubiaet al. (2010) recorded that diverse academic degrees would
contribute to various home categories being demanded and the purchase of high-priced houses
(Barlow and Ozaki, 2003). Meanwhile, a lower academic degree would lead to a reduced

11
willingness for house ownership (Majid, 2010). Working adults have a preference for houses
near their workplace due to their need to prevent excessive commuting time to the workplace
(Jun and Jones, 2013). Moreover, salary degree would also impact the housing market cycle
(Garcia and Hernandez, 2008). Besides the tendency of individuals with higher salaries to
purchase higher-cost houses (Ariffin, 2010), individuals with a low salary would face challenges
in house ownership (Tunner and Lue, 2009).
ii. Financial Factor
Financial factors are significant in a residence purchase decision. Finance refers to the
financial health of a person, which requires money, salary level, payment, interest degree, and
loan. It also indicates mortgage presence, conditions for the purchase, house cost, property
evaluation value, chances for swift acknowledgement, and duration for waiting (Chia, et al.,
2016; Jamil, 2015; Mariadas, et al., 2019; Opoku and Abdul-Muhmin, 2010; Yong Zhou, 2009).
Finance could also be identified as a long-term loan with a bank to purchase a house (Jan et al.,
2016), which has also become the most significant element in house cost in Nigeria (Chia, 2016;
Razak, 2013).
iii. Location factor
Location may refer to a point of interaction between individuals and facilities to fulfil
their liking (Zrobek et al., 2015). An ideal destination would be important despite the fluctuation
of the real estate market in the future, which is in line with the saying, “thou can make an ugly
house attractive but thou can’t make a bad location great”. Furthermore, the investment of
houses placed in an ideal destination would contribute to profits. Moreover, Oloke et al. (2013)
revealed that the largest rent capacity as location emerged as a mediating factor with an
excellent location advantage, which impacted the investors’ or buyers’ purchase decision.
Location refers to the ability of the selected house to be accessible from the nearest town,
shopping facilities, and relatives’ house (Khan et al., 2017).Adegoke (2014) indicated that the
locations of all categories of residential features were based on the accessibility to the buyers’
destinations.

iv. Dwelling Characteristics Factor

Dwelling characteristics refer to the structural elements of housing, which consist of the
duration of dwelling, room size, design quality, the number of toilets, bathrooms, and living
rooms, condition of construction equipment, wall fence and gate, the scheme of dwellings,
landscaping, and presence of space (Musa et al., 2016). Dwelling characteristics comprise the
conditions of the building, house design, finishing, and the design inside and outside the
12
building (Abdul-Muhmin, 2010). Hong (2012) highlighted that house dwelling comprised the
size of the dining hall, living halls, number of bathrooms, and bedrooms. Jayantha and Lau
(2016) argued that neighbourhood facilities also have several impacts on housing property
buying decision, including the presence of a landscape of park or garden, clubhouse, swimming
pool, and gymnasium. It was also perceived that the common perception among residence
owners with a higher status and symbol own a larger residence (Jun, 2013). A property with an
either ‘freehold’ or ‘leasehold’ title also affects buyers’ preferences during the purchase
decision. Hong (2010) stated that the ‘leasehold’ title indicates the property owner’s need to
return the land or pay a premium to the government after 99 years or whenever the leasing
duration is due. However, Mariadas et al. (2019) stated that buyers prefer the freehold title as
they are not required to return their building and land to the government.
v. Neighbourhood Factor
According to Sean and Hong (2014), a neighbourhood is an area where communities
reside together. Jayantha and Lau (2016) highlighted that neighbourhood involves interactions
between the communities, appealing surrounding and view, a peaceful site for getting together
and supporting one another. Households have a higher willingness to invest more for a good
neighbourhood in their selection of a home or residential property (Thaker and Sakaran, 2016).
According to Tan (2016), homebuyers would purchase a guarded residential property to indicate
their social ranking. Additionally, Carolina (2013) stated that buyers with good financial health
prefer a ‘higher-income’ neighbourhood as fewer renters are present.
vi. Infrastructure Facilities Factor
The ability for basic infrastructure facilities in the area to be accessible is a significant
element. Khan et al. (2017) stated that the most crucial decision-making process for home is the
presence of amenities, including location, playground, sports area, and institution, in which the
symbolised and socialised cultures should be taken into account. The general amenities,
including public transport and electricity and water supplies, are essential in the property buyer’s
purchase decision. Specifically, public transport is inter-related to economic development, which
facilitates the distribution of information regarding business prospects, leads to sprawl reduction,
and develops an ideal atmosphere of the site. Additionally, the effectiveness of the facilities
leads to a sense of security among the buyers during their residency (Almatarneh, 2013). A
properly schemed zoning of land use for the supervision of open and recreational spaces,
housing area, and community amenities is one of the elements influencing individuals’ residency
(Yakob et al., 2012).

13
vii. Environment Factor
Khan et al. (2017) divided the environment into physical and social environments.
Specifically, the physical environment comprises the physical feature and the quality of the
outer side of the building, proximity to natural areas, physical disruptions including pollution
and noise, entrance, and maintenance standard. Meanwhile, the social environment consists of
status, security, social connection, and lifestyle within the selected site.

2.2 Concept and meaning of residential property

In a broader perspective, residential property culminates properties used for living or
accommodation, otherwise known as houses e.g. mansions, housing estates, bungalows,
duplexes, flats, single room apartment etc. However, according to Chia and Haruna (2016),
residential property cannot be defined easily as a result of various professions approaching its
definitions from their own perspective. He agrees that the various definitions from various
professions are correct but connote one thing and that is the fact that real property comprises the
physical solum as well as the rights subsisting in them. Property according to him is capable of
ownership and possession. In his own view, Garcia and Hernandez (2008) defined residential
property as the rights, interest, benefit or privilege inherent in the ownership of landed property
giving rise to a measure of control. He went further to explain that residential property is
different from personal property. Also, Fortin (2014) defined residential property as the
combination of land and any permanent structures or man-made structures or improvements that
are permanently attached to the land with the aim of improving the land and enjoying its
utilities, amenities and profits or returns.
Residential properties according to Galaty, Allaway and kyle (2000) is a broad term that
encompasses natural land and manmade improvement on land with regards to housing
properties. Man made improvement could be any artificial thing, a house a road or a bridge that
forms part of the road. Real property (or realty) on the other hand is a broader term that refers to
the interest, benefits and rights that is automatically included to the ownership of land and real
estate.

2.2.1 Features of residential properties

Residential propertieshasunique special features that distinguish it from other forms of
properties. Many authors like Jan (2016), Ibemet. al., (2015) and Jun (2013), identified the
special features to include:

14
i. Ability to produce relatively consistent total returns that are hybrid of income and capital
growth.
ii. No fixed maturity: Equity real estate does not normally have a maturity period unlike
bond and other types of investment.
iii. Tangibility: an investor in real estate can visit his/her investment, speak with the tenants
or occupiers and show it off to family members and friends. This attributes makes a real
estate investor to have certain degree of physical control over his/her investment
iv. Requires management: Since real estate is tangible, it need to be managed to ensure
continuity e.g. tenants complaints must be addressed, landscaping must be handled,
renovation need to be attended to when age start setting in etc.
v. Inefficient market: Information asymmetry exists among participation in the market; this
has the advantage of allowing greater profits to be made by those with special
information, expertise or resources.
vi. High transaction costs: there are many costs associated with private market real estate
such as purchase/sale costs, real estate agent related commissions, lawyer fees, engineer
fees and many other costs that can raise the effective purchase price beyond the price the
seller will actually receive.
vii. Lower liquidity: with the exception of real estate securities, no public exchange exists
for the trading of real estate. This makes real estate more difficult to sell because deals
must be privately brokered and there can be substantial lag between the times you decide
to sell a property and when it is actually sold.
viii. Underlying tenant quality: this is considered because when investment in real estate is
made, two things are involved, the purchase of the physical property and the income
stream form tenants. If the tenants are likely to default in their monthly or yearly
obligation, the risk of the investment is greater which is not inherent in other types of
investment.
ix. Variability among regions: location is an important aspect of real estate investment. A
piece of real estate can perform very differently among countries, regions, cities and
even within the same city. The consideration on regional difference is very essential
when making real estate investment decisions as it has large impact on the eventual
returns from choice of property within the market.
x. Heterogeneity: property differ in terms of location, size, construction materials etc.It is
also amenable to change that is, its use can be changed from commercial to residential
and vice versa, which is not inherent in other types of investment.
15
xi. High cost of purchase relative to current income: Cost of purchasing real estate is most
time higher than relative current income of investor and at times not being able to be
financed by equity capital which requires mortgage financing.
xii. Legal factors: some legislation affects supply and demand of real property and hence its
value. Some legislation like rent edicts, town and country planning laws etc, have
considerable effectson value of real estate.
xiii. Yield on property investment are generally higher than yield on a similar sum invested in
other forms of investment.
xiv. Interest in property can often be used as security (collateral) against which loan finance
can be raised.

2.2.2 Residential Property market

Residential property market is a market where rights and interest in real property are
exchanged. Sellers and potential buyers are usually interested in the investment value of the real
estate. Hurtubia(2010) sees the residential property market as any medium where bundle or
cluster of rights are being exchanged. To him it could be a system of transaction between land
owners, land users, and estate agents. In such markets what is traded and sold is the interest in
land and landed properties such as freehold, leasehold, easement,licenses etc. and not
necessarily the physical property.
The property market is no formal market or organization bringing buyers and sellers
together. However, there is no special place identified as a property market but such market exist
wherever there is an interest or rights being traded by a seller and a buyer. Besides the purchase
and sale of rights, other transactions may be required in a property market. A land owner may
wish to know current market rent to establish a profitable rental schedules and a potential tenant
may need information to decide if the rent and lease provisions are fair to the parties who are
exchanging interests. Hui and Mei (2019) also described real estate market as organizational
possibilities and means which allow acquisition, exploitation renovation, or sale of the property
according to certain rules which are mostly defined by economical system.

2.2.3 Concept of Demand and Supply

There are so many definitions of demand and supply but this study focuses on the
definition as it concerns residential properties. Demand according to Oyebanji (2003) means
need, want or desire. It is referred to as the totality of a commodity (land and building) which
people want and are willing to buy, lease or let at a specified price and at a given period of time
16
all other factors being equal. Supply on the other hand is the amounts of goods and services
(land and building) which sellers or owners are willing to offer in the market for sale, lease or
letting at a given price over a period of time, all other factors being equal. The above definition
reveals that demand and supply of residential property facilities concerns the quantity of land
and landed properties which buyers need and are willing to buy, lease or let given specified price
and at a given period of time. In most urban and rural areas of developing countries Nigeria
inclusive, there are varying demand of real estate facilities but the major factor that confront the
buyers is the cost (price) at which to purchase lease or let such facilities, this factor among other
factors have created a wide gap between demand and supply of real estate facilitates.

2.2.4 Demand and supply of residential properties

Many scholars have examined the demand and supply of residential property facilities in
Nigeria and other developing economies and discovered that there is a wide gap between
demand and supply of such properties. International Housing Coalition (IHC, 2008) noted that
the shortage of decent housing in sub-Saharan Africa’s burgeoning cities and towns particularly
for low and moderate income families is already acute and growing worse day by day. IHC
(2009) also observed that with urban growth rate of 5% per annum, it is estimated that by 2030,
Africa’s cities and towns will have to accommodate more than 300 million new residents.
According to IHC (2009) a reasonable estimate is that at least 7000 units per day or 290 units
per hour will be required throughout the region to eliminate the current housing deficit and
provide for new urban dwellers. It has been identified that cities already unable to cope with the
dramatic levels of urbanization will be completely overrun with informal settlements and
slums.Also, Oladimeji (2008) noted that rapid growth in Nigeria economy translated into an
equal rapid growth in the demand for institutional quality real estate and that the sign is
observed from the country major markets of Lagos, Port-Harcourt, Calabar and Abuja. He noted
that the growing demand has been met with very limited supply, resulting in high and growing
rents in these markets hence creating an opportunity for profitable real estate investment. The
above works however, exposed the gap between demand and supply of residential property
facilities and also brought to limelight opportunities available to investors that embark on real
estate investments.

2.2.5 Investments in residential property markets

The literature is fairly settled on the factors that constrained or otherwise determine
private investment in residential properties. Authors like Serven (2017), Jayaraman (2016) and
17
Duncan et al. (2019) have carried out empirical and stochastic investigations on the determinant
factors of private Investment in residential property markets. Most of them discovered that
Private investment behavior is primarily influenced by the profit motive plus other factors such
as wages rate, real exchange rate policies, and raw material costs, rate of inflation and
appropriate pricing of capital, labour and land.According to Duncan et al. (2019), user cost of
capital is an important factor in any investment decision by the private sector. When the user
cost of capital is increased by raising the cost of bank credit or by increasing the cost of retained
earnings, which is the main source of financing investment, there is a decline in investment.
Whereas there is a consensus in the literatures on the factors discussed so far, findings of various
empirical studies are not, however, consistent on the relationship between interest rates and
investment. While certain studies such as that of Hurtubiaet al., (2010) have confirmed the
negative relationship between interest rates and investment, study by others like Duncan et al.
(2019) has shown that in repressed financial markets, credit policy affects investment in a
distorted manner.On investors and real estate investment decisions, (Ogunba and Oloyede, 2013
among others) on valuers and valuation accuracy, have further shown evidence of irrationality
and inconsistency in the way human beings make decisions when faced with uncertainty.Wealth
accumulations and long-term capital gain as well as attitude are the major motivation for real
estate investment. The concept of ‘real wealth increase’ by Flint-Hartle (2013) however
illustrated that, the smaller the outlay of the investor’s own equity, the greater the wealth
increase. The most prominent factor that influences real estate investor is the earning rate or
profitability. Basically, profitability is assumed having positive relationship with the risk, offset
relationship between profit and risk.

2.2.6 Investor performance measurement of various locations

A very important, one of basic factors that determine the attractiveness of real estate
investment and influence investment value is the location, so a geographical location factor may
be one of the main determiners of making investment decisions. Location aspect is understood in
a broader way by Matkowski (2011) who indicate that location covers both physical location of
an estate as well as its place in the socio-economic environment (economic location). The
economic location is comprehended by the authors as accessibility to social and technical
infrastructure as well as an opportunity to use synergy effect resulting from the activities of
nearby business entities. Good location translates into prospective high income and increasing
value of real estates, while bad one means high likelihood of a loss (Bryx, Matkowski 2001, p.
81). A decision concerning location is influenced particularly by such factors as: infrastructure,
18
transport access, market absorption rate, distribution channels, qualified workforce, well-
developed industry and promotion. (Belniak, 2022)
The first group of criteria of real estate investment valuation included within frames of
the presented methods constitutes traditional, static measurements of efficiency of investment in
real estates.Some of the fundamental traditional measurements are: capitalisation rate –
understood as the ratio between net operating income and market value of the real estate, return
on investment – which reflects any achieved or prospective income from the investment versus
the expenses on the investment, multiplier of net income – understood as the ratio between
overall capital investment and net operating income from the estate, minimum debt-service
coverage ratio – the ratio between operating net income and debt-service coverage expenses
(capital instalment and interest), operational expenses ratio – the ratio between operational
expenses generated by the estate and real gross income, return on equity – understood as the
ratio between net operating income and market value of the real estate and profitability measure
– the ratio between annual net expenses and market value of the real estate (Okoro, 2018).

Detail level of profitability analysis of investing in real estates as well as selection of

variants and methods of efficiency calculus method depend on above all the investment scale
and level of recognizing market situation and parameters. According to Bryan (2021), most
detailed form of analysis preceding any investment decisions is due diligence. Due diligence of
real estates covers in particular all micro and macroeconomic aspects, financial (income and
expenses related to owning and managing estates), legal, tax, technical, organisational, purpose
of the estate, psychological and informational. All above factors considered in terms of
analysing investment in real estates include economic characteristics of the real estate.
Economic characteristics of the real estate cover the properties of the estate that impact upon the
level of net operating income. They encompass such factors as maintenance costs, quality of
management, selection of tenants, rent discounts, rent terms and conditions, agreement
expiration dates and possibility to prolong agreements. (Wycena, 2020)

It can be concluded that the most important determinants of investors performance

measurement of different locations while investing in estates are as follows:

i. the value of purchased property,

ii. income from the property,
iii. operating costs related to the property,
iv. the time of entering and retreating from the investment,

19
v. duration ofproperty ownership,
vi. costs of capital engaged to finance the property,
vii. legal regulations.
The above factors reflects the basic determinants of profitability of investing in
properties located at different locations in a geographical entity. Each investment made in
market conditions should be regarded in terms of conditions for acquiring the sources to finance
the investment. It requires making a choice with respect to type, structure and sources to finance
the investment project. As it was already mentioned, the decisions on capital structure should
take into account the influence of capital structure on the weighted average cost of capital that
defines the necessary return on investment which the investment project must achieve in order to
be accepted and approved by the investor.

The first stage of the analysis of factors determining the profitability of investing in
estates is the analysis of the level, dynamics and structure of values of purchased estate,
potential income from the estate in the researched period as well as operating expenses incurred
by the owners of the estate in relation with the maintenance costs. A value indispensable to
determine the rate of return on investment in estates is the sale price on the primary market.
Another determinant of investment profitability is the rental rate constituting income for estate
owner. However, the objective of operating costs analysis, i.e. expenses for maintaining the
estate when it is owned, is to examine the levels of particular types of these expenses and
changes occurring in the relation between particular types of expenses and rates of return on
investment.

2.2.7 Investors dependence on valuers, property brokers and agents

Property valuations perform an essential role in property markets. They provide advice
on prospective purchase and sale and supply material information to underpin the property
lending decision. Since the 1960s and 1970s, property valuations have also been used to proxy
the exchange price of property investments for performance measurement purposes. This latter
use of valuations exacerbates existing differences between the operation of property and other
investment markets where performance measurement is undertaken by reference to transactions.
This, in turn, has been used by some analysts to argue against property as a portfolio asset. The
underrepresentation of property in many portfolios, as compared to that suggested by the use of
valuation-based indices, might be evidence that the industry does not accept valuations as valid
indicators of prices and hence returns. Gauging the impact that valuations have on clients'
decision-making, however, requires looking beyond valuation issues per se. Having considered
20
how valuers may actually behave in producing these valuations, it is also necessary to
investigate how valuers interact in this process with clients and how clients utilise valuers'
advice in making investment decisions. These are complex situations that are unlikely to be
fully captured by economic models that assume purely rational utility maximising behaviour.
Furthermore, a complementary perspective from which to view the valuer/client relationship is
that of the economics of information. In this, the relationship can be analysed in terms of a
principal-agent problem. Such problems are found where one individual acts on behalf of
another in undertaking some activity where there is moral hazard. Essentially it is based on the
premise that rational persons always prefer the alternative that makes them better off. Ideally
the principal is seeking the perfect agent who will always make decisions without regard to their
own interests or preferences. A key problem is that the principal is unable to observe fully the
actions of the agent. Hence there is information asymmetry.

2.2.8 Measurement of real estate returns and risk at different locations

The properties of real estate return distribution are of importance for the portfolio
manager as they provide key inputs into the assets allocation process. Real estate return is
measured in terms of total return (TRt) which comprises income return (IRt), and capital return
(CRt), (Hoesli and MacGregor, 2000, Baum, Mackmin and Nunning,
2011).Mathematically,totalreturnisexpressedas:

TRt= (CVt- CVt-1) + NIt

CVt-1

Where

TRt = totalreturnforperiod - t

NIt =netincomereceivedduringtheperiod - t

CVt-1 =capitalvalue(price)atthestartofperiod - t

CVt =capitalvalue(price)attheendofperiod – t.

Total return is also known as holding period return in thesecuritiesmarket

On measurement of real estate risk, Ajayi (2015) opined that investors in property of various
types are uncertain about the outcomes of their actions. Future events are difficult to forecast in
21
precise terms and over time such forecast becomes unreliable. He stated further that risk is the
level of probability that required return measured in terms of capital value and income would be
achieved. Uncertainty implies that neither alternative outcomes nor their probabilities could be
identified. Oni (2010) further explained that risks occur in many and diverse ways at every stage
of the investment process and include systematic and non-systematic risks. Systematic risk, also
called market risk, refers to the risk common to all securities and cannot be diversified away
within one market. Unsystematic risk is associated with assets value caused by factors that are
specific to the subject real estate. There is also the downside risk derived from volatility in the
development variables that affect the investor’s profit, such variables are rent, void period, yield,
construction cost, building period, land cost, and marketing cost, as reported by Ogunba (2002)
and Ogunba et al. (2003).
Risk is the probability of variation between actual and expected returns. But Kalu (2001)
distinguished risk from uncertainty since three situations arise in decision making, namely,
certainty, uncertainty and risk. He reasoned that “in certainty the event is likely to occur and
there is likelihood of measuring the probability of its occurrence; uncertainty means that the
probability of the occurrence of a particular event is not known and cannot be estimated while in
risk the probability of outcomes are known or can be estimated” (Kalu, 2007). But Ajayi (1998)
posited that risk has two perspectives,thedownsideriskandupsidepotential. He explained that the
amount by which actual outcome falls short of expected outcome is downside risk while the
amount by which the actual outcome exceeds expected outcome is called upside potential.
The measurement of risk is by way of statistical standard deviation. Hence, Baum and
Crosby(2007) and Hoesli and MacGregor (2000), all agree that the traditional approach is to take
the standard deviation of the historical variability as a measure of risk and that variance or
standard deviation is the most frequently used measure of dispersion and interpreted as risk.
Therefore,toevaluaterisk,thestandarddeviationof ungrouped data is used. Bello
(2013)statedtheformulaas:

√∑
n
S= ¿¿ ¿ ¿ ¿
i=0

Where:

S=standarddeviation

N =totalnumberofperiods

22
 CHAPTER THREE
RESEARCH METHODOLOGY

This chapter outlines the research methodology that will be used in the study. The

chapter will cover the research design, population and sampling techniques, data collection

methods, and data analysis techniques.

3.1 Research Design

The study adopted the descriptive survey research design approach. This design was

chosen because it allows for the collection of data on a specific population and the analysis of

the data to determine the factors affecting the purchase decision of investors in the residential

property market in Calabar.

The descriptive survey involved the use of a structured questionnaire to collect data from

respondents. The questionnaire will be designed to gather information on the awareness,

understanding and ranking of factors requisite for consideration by investors before purchasing

of residential properties.

3.2 Population of the Study

The population for this study will comprise real estate agents, residential property

owners and stakeholders in the residential market sectors in Calabar, who had made purchases of

real estate and those that have not yet made a purchase but intend to do so. This population were

limited to civil servants and staffs of the Ministry of Lands and Housing. The population will be

selected using convenience sampling technique to obtain participants for the study.

3.3 Study Area

This study area of this research is Calabar Municipality. Calabar is the capital city of

Cross River State, Nigeria. It is located in the southern part of Nigeria, on the Atlantic coast. It is
23
bordered by Akwa Ibom State to the west and Cameroon to the east. The city is known for its

cultural heritage, natural attractions, and economic activities, including real estate. Calabar

Municipality is a local government area in Cross River State, Nigeria. It is situated at longitude

8° 19' 12" E and latitude 4° 57' 36" N (Okafor and Okoye, 2019). The municipality covers an

area of approximately 406 square kilometers and is located on the eastern side of the Cross-

River estuary (Ifeanyi, 2020). It is bordered by Akpabuyo Local Government Area to the south,

Odukpani Local Government Area to the west, and the Calabar South Local Government Area

to the east (Ifeanyi, 2020). A lot of residential properties are located within the study area.

3.4 Sampling techniques and sample size

Respondents for this study were selected using both purposive sampling and simple

random sampling technique. The respondents from the Ministry of Lands and Housing were

sampled using purposive sampling while the civil servants who owned owned landed properties

were sampled using simple random sampling technique. Selected ministries in the metropolis

served as the sample frame. The total number of the civil servants from the selected ministries

totaled 550. Using the Krejcie & Morgan (1970) table, the sample size for this study stood at

226.

3.5 Method of data collection

Both primary and secondary data were sourced for the purpose of accomplishing the

research objectives.

 Primary source; required data was sourced using self-administered questionnaires.

This type of questionnaire reduces the cost of postages and travel, and interviewer

bias (Gorard, 2001)

 Secondary source; this data was collected from past research work such as

conference papers, journals articles, and literature on related topics.

24
3.6 Instrument for data collection

The questionnaire used in this research contained close-ended questions and self-

assessment items, measured on a 5-point Likert scale. Close-ended questions have been reported

by Gorard (2021) to be preferable in questionnaire designs. The questionnaire was divided into

two sections. The first section contained questions on the personal data of the respondents and

the second section was on the research objectives of the study. The questions were designed in

such a way that it will help the researcher to source necessary data for achieving each of the

objectives of this study.

3.7 Method of data presentation and analysis

The data collected was analysed using the Statistical Package for Social Sciences (SPSS)

version 22; relative important index, descriptive statistics and frequency distribution tables were

used to present the results.The rating of all the variables for degree of significance was based on

the value of their respective relative importance index (RII). Mbamali and Okotie (2012),

Interpreted of the RII Values as follows: RII < 0.60, item is assessed to have a low significance,

0..6 ≤ RII < 0.80, item assessed to have high significance, RII ≥ 0.80, item assessed to have very

high significance.

25
 CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.0 Introduction

This chapter addresses data presentation and analysis and is an important aspect of any

research process as it enhances understanding of the findings of the research. The data were

presented in tables, graphs and statistically analyzed using Statistical Package for Social Science

(SPSS. version 22.). Descriptive statistics (frequency and percentage), were used to find whether

or not significance difference due exist based on the research question that guided the study.

4.1 Data Presentation and analysis

4.1.1 Analysis of Returns

A total of 226 questionnaires were distributed and 184 were properly completed and

returned representing a percentage response of 81%. According to Moser and Kalton (2017), the

result of a survey could be considered significant if the response rate is not lower than 30-40%.

Therefore, the response rate is considered to be adequate.

Table 4.1: Analysis of the distribution and return of questionnaires

Questionnaire Distributed Frequency (No.) Percentage (%)

Returned 184 81

Not Returned 42 19

Total 226 100

Source: field survey, 2023

26
4.2 Analysis of personal data

Table 4.2: Gender of the respondents

Gender Frequency (No.) Percentage (%)

Male 144 78.3

Female 40 21.7

Total 184 100

Source: field survey, 2023

Table 4.2 shows the frequency and percentage of respondent gender. 144 respondents (78.3%)

were male and 40 (21.7%) were female. This indicate that male were more sampled than female.

Table 4.3: – Age of the respondents

Age of the respondents Frequency (No.) Percentage (%)

20-29 years 35 19.0

30-39 years 57 31.0

40-49 years 92 50.0

50-59 years 0 0.0

Total 184 100

Source: field survey, 2023

This is the most important characteristics of the respondents. From the table 4.3, it can be seen

that the 35 respondents representing (19%) were 20-29 years of age, 57 (31.0%) were between

27
the age of 30-39 years and 92 (50%) were between the age of 40-49 years of age. This implies

that majority of the respondents were between the age of 40-49 years.

Table 4.4: – Academic Qualification

Academic Qualification Frequency (No.) Percentage (%)

B.Sc 88 47.8

M.Sc 41 22.3

Ph.D 46 25.0

Professor 9 04.9

Total 184 100

Source: field survey, 2023

The essence of asking this particular question was to make sure that the respondents are

equipped with certain minimum educational qualifications that will enable them respond

correctly and confidently to the questions. Table 4.4 shows all the respondents were educated to

a reasonable extent. 88 respondents representing 47.8% attained B.sc level, 41 respondents

(22.3%) attained M.sc level, 46 respondents (25%) attained Doctorate degree level and 9

respondents (4.9%) attained the rank of professors. This mean that majority of the respondents

are diploma level.

Table 4.5: – Income of the respondents

Income Frequency (No.) Percentage (%)

Below N 25,000 44 23.9

N 26,000- N 45,000 53 28.8

28
N 46,000- N 70,000 16 8.7

N 71,000- N 120,000 and above 71 38.6

Total 184 100

Source: Field survey, 2023

The result of the analysis of income distribution of respondents is contained in table 4.5

which shows that 23.9% of the respondents earned less than N25,000.00, those that earned

between N26,000.00 and N45,000.00 constituted 28.8%, respondents that earned between

N46,000.00 and N70,000.00 constituted 8.7% while 38.6% earned N71,000.00 to N120,000.00

and above.

4.2 Results

4.2.1 Objective 1: To evaluate the process of residential property acquisition in the

study area

Table 4.6: Process of residential property acquisition

S/N Item 1 2 3 4 5 ∑f ∑fx Mean RII Position

1. By purchase 16 - 8 53 107 184 777 4.22 0.84 1st

1. Inheritance by heirs of the owners - 9 55 80 40 184 503 2.73 0.54 4th

3. Through donation or gift of land - 45 90 49 - 184 556 3.02 0.60 2nd

4. Lease (rent are paid to owners) 29 33 81 33 8 184 510 2.77 0.55 3rd

Key: 1- Strongly Disagree, 2- Disagree, 3-Neutral, 4- Agree, 5- Strongly Agree

Source: Field Survey, (2023)

29
 Table 4.6 shows that the process of residential property acquisition in Calabar metropolis

has been ranked accordingly. The highest rank is by purchase with the value of RII as 0.84,

which is regarded as a source with very high significance because the relative important index

(RII) is greater than 0.8. Through donation or gift was ranked second with the value of (RII) as

0.60 which is of high significance. Acquisition by inheritance and lease were ranked third and

fourth respectively with the values of 0.55 and 0.54 with RII assessed to be of low significance.

4.2.2 OBJECTIVE 2: To examine the factors affecting the purchase decision of investors

in the residential property market

Table 4.7.1: Location factors affecting the purchase decision of investors in the residential

property market

Weights
No Factors
5 4 3 2 1 Total RII

1 Proximity to waste site 260 152 78 20 4 514 3.954

2 Nearness to schools 275 188 45 20 3 531 4.085

3 Proximity to highway 305 200 48 6 0 559 4.300

4 Nearness to shopping centres 265 200 63 8 2 538 4.138

5 Nearness to worship centres 225 160 105 18 1 509 3.915

6 Nearness to the airport 140 96 63 38 38 375 2.885

Source: Field survey, 2023

The analysis showed that proximity to highway rank highest among the listed locational

factors affecting residential property purchase. This is closely followed by nearness to shopping

centres and schools while nearness to the airport rank lowest on the relative importance index

scale. It would be noted that nearness to waste site is ranked higher in RII scale than nearness to
30
worship centres and this is because there is no major dumpsite within or around the study area

that could pose any serious challenge to human habitation.

Table 4.7.2: Structural factors affecting the purchase decision of investors in the residential

property market

Weights
No Factors
5 4 3 2 1 Total RII

1 Number & size of bedrooms 285 180 90 0 0 555 4.269

2 Number of toilets and bathrooms 270 188 48 14 6 526 4.046

3 Age of building 220 136 99 28 12 495 3.808

4 Availability of fire place 55 52 153 86 36 382 2.938

5 Size of land and building 240 164 45 14 19 482 3.708

6 Availability of swimming pool 195 144 27 42 25 433 3.331

Source: Field survey, 2023

Analysis of structural factors affecting residential property purchase by investors showed

that the number and size of bedrooms in a residential property indicated by a relative importance

index of 4.269 on the RII scale is the most important factors affecting its value. This is closely

followed by the number of toilets and bathroom with a RII of 4.046 as well as the size of land

and building with a RII of 3.808. Moreover, availability of fire swimming pool and fireplace has

the minimum RII of 3.331 and 2.938 respectively meaning they are less influence on residential

property purchase in the study area.

Table 4.7.3: Neighbourhood factors affecting the purchase decision of investors in the

residential property market

31
 Weights
No Factors
5 4 3 2 1 Total RII

1 Estate plan and quality designs 305 188 0 26 9 528 4.062

2 Infrastructure development 355 212 0 4 4 575 4.423

3 Ethnic mix 15 52 81 158 8 314 2.415

4 Owners/renters mix 85 52 123 72 23 355 2.731

5 Security 235 152 33 38 15 473 3.638

6 Power supply 205 128 69 48 10 460 3.538

Source: Field survey, 2023

Analysis of responses about neighborhood factors affecting residential property purchase

decision of investors revealed that the level of infrastructure development with a RII of 4.423 is

the most important neighbourhood factor influencing property values followed by estate plan

and quality designs with RII of 4.062. Ethnic mix and owners/renters mix are of less influence

on property values when compared to others in this category. Most residents of the estate are

attracted to the area not only because of the level of infrastructure development such as road and

drainages as well as good estate plan and quality designs.

4.2.3 OBJECTIVE 3: To identify the socio-economic variables affecting variables affecting

the purchase decision of investors the study area.

32
Table 4.8: Socio-economic Variables Affecting variables affecting the purchase decision of

investors

S/N Socio-economic Variables 1 2 3 4 5 ∑f ∑fx Mean RII Positio

1.Security of Land Tenure and Act 35 17 34 61 37 184 600 3.26 0.65 2nd

2.Alienation of Land Owners 8 53 78 45 - 184 580 2.89 0.57 4th

3. Restriction of Land Owners 17 69 80 18 - 184 467 2.53 0.51 5th

4. Land Disputes and Conflicts 8 16 72 88 - 184 824 4.48 0.89 1st

5. Real Property worth 26 26 54 45 33 184 585 3.18 0.64 3rd

6.Investment insurance 72 26 21 41 24 184 471 2.56 0.51 5th

Key: 1- Strongly Disagree, 2- Disagree, 3-Neutral, 4- Agree, 5- Strongly Agree

Source: Field Survey, (2023)

Table 4.8 shows the socio-economic variables affecting variables affecting the purchase

decision of investors in Calabar metropolis as ranked accordingly. The highest ranked variable

that affect acquisition of land is the land dispute and conflict with the value of RII as 0.89, thus

regarded as a factor with very high significance because the relative important index (RII) is

greater than 0.8. Also security of land tenure and real property, ranked second and third

respectively with the values of relative important index (RII) as 0.65 and 0.64 having high

significance. Alienation of land owners, restriction of land owners and investment ranked fourth,

fifth and sixth respectively with their relative important index (RII) as 0.57, 0.51, 0.51 assessed

to be of low significance.

33
34
4.3 Discussion of findings

The factors affecting the purchase decision of investors in real market within Calabar

metropolis were analyzed first based on demographic data of the respondents. Majority of the

respondents in terms of gender are male and the range between the age 30-49years. The range of

their academic qualifications are between B.Sc. and Professor degree. The majority of the

respondents’ level of income range betweentheN26, 000-N120,000. The sources of acquiring

residential properties, factors considered by investors before purchase decision is made and

socio-economic variables that affect investors purchase decision were analyzed.

In order to put the conclusions of this study in their proper perspective it is necessary to

summarize its key points and reiterate its main findings and conclusions. The research has

shown that on the basis of sources of aacquiring residential properties in Calabar metropolis,

majority of the respondents acquire such properties through purchase, while inheritance by heirs

of the owner, through donation or gift of land and lease are neutral as attest to it. This was rated

with a significant level of (RII ≥ 0.80), level of significance, while donation or gift of land and

lease (rents are paid to owners) and also significantly at(RII < 0.60). This tallies with the study

of Nubi (2020) who is of the opinion that availability and accessibility landed properties; cost

of processing and perfecting land titles; cost of construction and income; acute shortage of

skilled personnel of various trades in the construction industry; cost of building materials;

saving; and low contribution to the National Housing Fund are the problems confronting

affordable housing.

Furthermore, the study revealed opinions from majority of respondents on the locational,

structural and neighbourhood factors that affects residential property purchase decision of

investors. Results indicates that Although, majority of the residents in the study 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

35
invariably implies that residents are indirectly paying more to live in the study area. It was

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 study area. Despite the many

potentials for industrial development in the Kosofe local government, it is not clear or

mentioned that these potentials are been fully harnessed as there are no immediate central or

sectoral business district in the study area.

Lastly, the study has shown that land disputes are the major socio-economic variables

affecting residential property purchase decision of investors, recording a Relative Important

Index (RII ≥ 0.80), level of significance. Security of land tenure and real property were

significant at (0..6 ≤ RII < 0.80). Also, alienation of land owners, registration of land owners,

and investment affect acquisition of land for property development and significant at (RII <

0.60) level of significance.

36
 CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION

5.1 Summary

This study aimed to assess the factors affecting the purchase decision of investors in the
residential property market in Calabar, Nigeria. The study’s objectives were:
i. To evaluate the process of residential property acquisition in the study area

ii. To examine the factors affecting the purchase decision of investors in the residential

property market

iii. To identify the socio-economic variables affecting the purchase decision of investors

in the residential property market

The study used a sample size of one hundred and eighty-four respondents. Using the
survey design, data was collected using a structured questionnaire, and both descriptive and
inferential statistics were used to analyze the data. Findings of the study revealed that high cost
of land purchase, inconsistency in government policies, population growth, income level, high
and unnecessary costs and long wait for getting feedback from legal authorities as well as land
disputes as the challenges that affect affecting the purchase decision of investors.

5.2 Conclusion

In this research, it is found that the investment decisions of investors in the study area are

influenced by certain identified factors. The most important principal factors are Land

affordability, land accessibility, ease to land acquisition, land security, profit motive and

political stability in the study area. The study also revealed that investor’s hometown also

influenced their choice of location. The study also established that one does not necessarily

require a formal education to own an investment in real estate or landed property ownership. It

was further observed that security of land tenure and title, land dispute and conflicts, real

37
property are the three socio-economic variables affect land accessibility for the development of

properties in Calabar metropolis.

5.4 Recommendations

In view of the various problems observed in the study, some policy recommendations are

proffered which are aimed at reducing and easing the current constraints faced in the acquisition

of land for property development in Calabar metropolis of Cross River State. They include:

i. The need for statutory reshaping of the processes inherent in real estate purchase so as to

improve access to acces of residential properties and guarantee effective property

development.

ii. The procedure for residential property access should be made less cumbersome, since

this poses great problems to those who seek land for development purposes.

iii. Efforts should be made to address the problem of traditonal land owners’ syndrome.

Appropriate legal actions should be taken against it where necessary.

38
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 APPENDIX I
QUESTIONNAIRE

Department of Estate Management,

Faculty of Environmental Sciences,
University of Cross River State (UNICROSS)
11th October, 2023

Researcher.

Dear Sir/Madam,

I am undergraduate student of the above named department and faculty. Am undertaking

a survey as a requirement for an award of B. Tech Degree in Estate Management. This
questionnaire is designed to obtain information necessary for completion of my research
work. The information sought from you is needed for academic purpose and it will be
kept confidential.

Kindly co-operate by completing the attached questionnaire.

Thanks.

Researcher

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 SECTION: A

PERSONAL DATA
1. Age of respondents:
(a) 20-29 years [ ] (b) 30 -39 years [ ] (c) 40 – 49 years [ ] (d) 50 – 59 years [ ]
(e) Over 60 years [ ].
2. Sex: (a) Male [ ] (b) Female [ ]
3. Academic qualification:
(a) Diploma [ ] (b) B.Sc. [ ] (c) M.Sc. [ ] (d) Doctorate Degree [ ] (e) Others ……
4. Income level of the respondents:
(a) Below N25, 000 [ ] (b) N26, 000 – N45, 000 [ ] (c) N46, 000 – N70, 000 [ ]
(d) N71, 000 – N120, 000 and above [ ]

SECTION: B
Please indicate as appropriate as follows: SD=Strongly Disagree, D=Disagree, N=Neutral,
A=Agree, SA=Strongly Agree.

1. Process of residential property acquisition by investors

S/No Sources SD D N A SA
1 By Purchase
2 Inheritance by heirs of the owner
3 Through donations or gifting of land
4 Lease (rents are paid to owner)
Factors affecting the purchase decision of investors in the residential
property market
Location factors
5 Proximity to waste site
6 Nearness to schools
7 Proximity to highway
8 Nearness to shopping centres
9 Nearness to worship centres
10 Nearness to the airport
Structural factors
11 Number & size of bedrooms
12 Number of toilets and bathrooms
13 Age of building
14 Availability of fire place
15 Size of land and building
16 Availability of swimming pool
Neighborhood factors
17 Estate plan and quality designs
18 Infrastructure development
19 Ethnic mix
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 20 Owners/renters mix
21 Security
22 Power supply

3. Socio-economic variables affecting process of residential property acquisition in

the study area
S/No socio-economic variables SD D N A SA

23 Security of Land Tenure and Title

24 Alienation of Land Owners
25 Restriction of Land Owners
26 Land Disputes and Conflicts
27 Real Property
28 Investment

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 APPENDIX II

Table for determining sample size of a known population

Source: Krejcie& Morgan, 1970

45