EFFECT OF URBAN LAND USE PLANNING REGULATIONS ON RESIDENTIAL PROPERTY INVESTMENT RETURNS IN NORTHWEST, NIGERIA

Abstract

Residential property investment is among the primary ascribed investment globally and its ab-initio affected by varying level of planning risk. However, identifying and disentangling this risk- return attributes most especially as it relates to urban land use planning regulations have been an unresolved challenge. This problem has therefore, made investment in residential property to be shrouded with uncertainty, thereby undermining the potentials in investing in residential property, particularly with the general dwindling of global economy. In this context, this research examined the effect of urban land use planning regulations on residential property investment returns. The research developed a predictive model to solve the problem of voids in residential property attributed to non-compliance to ULUPRs that dampen RPIRs in Northwest, Nigeria. Subsequently, a set of closed-end questionnaires were administered to 389 estate surveying and valuation firms and town planners. The study employed a cross sectional/longitudinal approach to collect quantitative data. The data collected were analysed with the aid of quantitative method of data analysis which include descriptive statistics (percentages, weighted means, standard deviation, coefficient of variation, trend analysis/graph) and inferential statistics (regression, correlation “SEM AMOS” ANOVA). The findings showed that total returns from residential properties ranged from 7.93% to 12.68 % and the risk-return ratio ranging from 25.06% to 54.94% in Kaduna metropolis property market while in Kano metropolis property market, total return ranged from 6.99% to 14.44% with risk-return ratio ranging from 24.99% to 51.54%. The predictive model revealed that urban land use planning regulations explained 32% of residential property investment returns. The study thus, recommended that for risk averse investor in Kano metropolis Badawa property market is the best location while for Kaduna metropolis Malali property market is the ultimate location. It is also recommending that in order to have a more practical significance the Nigeria institution of estate surveyors and valuers should encourage it members to always carry out performance evaluation of residential property in their portfolio through total return-risk assessment and utilise this residential investment returns model capturing ULUPRs so developed, in assessing RPIRs for both local and international investors. Identifying specific clientele housing requirement and improving on it provision will have positive implication on the clientele willingness to pay for the housing as a whole product. This could be achieved by enlightening the government on the benefit of providing the user specific amenities that are its core responsibilities and monitoring development control in line with research findings while residential investors also need to adhere strictly on discovery of it user specific requirement in the RPIRs model and ULUPRs manual.