Effect of Flood Risk on Property Value in Kaduna Metropolis, Nigeria

Abstract

The study aimed at determining the effect of flood risk on property investment across four predominant flood areas in Kaduna by examining the trend in rental values vis-a-vis relative distances of flood risk zone from residential properties investment. The study randomly selected 200 residential properties within 300m radius of flood risk zone across the study areas and relative distances were measured using geographical information system (GPS). Data on historical rental trends (2010-2015) across the study areas were sought directly from registered estate firms in Kaduna through systematic random sampling. The study employed descriptive graph to analyse the trend in rental values and relative distances of selected properties from flood risk zone. The result of descriptive analysis revealed that after 2012 flood, the rental of 1B/R, 2B/R and 3B/R dropped by between 16.7%-20%, 16.7%-13% and 11%-25% respectively in 2013 in Kigo and Rafin Guza areas but the rental value in Ungwan Rimi and Banawa areas were unaffected after the 2012 flood. Furthermore, the result of correlation showed a positive significant relationship between rental values and relative distances of flood risk zone from residential properties at 0.893 and 0.908 in Kigo and Rafin Guza respectively, and the result of regression analysis showed that 79.8% and 82.5% variation in rental values of Kigo and Rafin Guza were significantly influenced by relative distances of flood risk zone from residential properties, Angwan Rimi and Banawa were insignificant. Study concludes that the high land value in Ungwan Rimi and Banawa has provided an edge against the influence of flood and therefore they are not affected significantly by the flood. The study recommends that an investor who wishes to invest in Kigo and Rafin Guza should locate such investment far away from flood risk zone at minimum distance of 300m.