The Contributory Effect of Externalities to the Void Periods for Residential Buildings in Minna, Nigeria

Abstract

A number of residential buildings have been observed to suffer longer void periods in recent times despite the increasing demand for residential accommodation across urban areas. Landlords and real estate investors are sometimes faced with the challenge of replacing tenants within the shortest possible time, thus being unable to adequately recoup the invested capital on residential properties developed in particular neighbourhoods. This study provides evidence on the contributory effect of externalities on the void period for residential buildings in Minna. The sample for the study constituted a total of 207 three bedroom bungalows which fell into void at any point between January 2014 and December 2016 – covering a three year period. Adequate data were provided for 144 of these dwellings which spread across nine neighbourhoods, representing 70% response rate. Data were sourced from practicing estate surveyors & valuers, and estate agents in the study area, as well as occupants of housing units that fell within the sample. The sourced data provided information on the void periods of sampled dwelling units as well as required information on selected externalities. Collated data were analysed using the optimally scaled categorical regression analysis. The regression model explained 51% of the total variation in the void period of residential buildings. Findings revealed that the void periods of residential buildings reduced with closer distances to shopping centers, recreation centers, major roads, and improved electricity supply. On the contrary, educational institutions, health care centers, refuse dumps, security and sources of water supply were found not to have significant contributions to the void period of three bedroom bungalows in the study area. The study recommended that real estate investors’ should be mindful of externalities in an area before embarking on real estate developments in order to ensure satisfactory returns on their investment.