Publisher: Central Bank of Nigeria

On The Development of Residential Property Price Indices For Nigeria

Abiodun S. Bada, Olorunsola E. Olowofeso, Mohammed A. Bamanga, Kufre J. Bassey, Kumafan S. Dzaan
KEYWORDS: Central price tendency; Growth rate; Real estate market; Residential property price index; Sale-based stratification method.

ABSTRACT:

This work focuses on the development of house price indices for Nigeria, and the estimates of the Nigerian Residential Property Price Indices on housing characteristics are presented. Four main methods of index construction were considered, these are hedonic regression, repeat-sales, stratification and central price tendency methods. It was discovered that econometric methods like hedonic and repeat sales were constraints in constructing residential property price indices for Nigeria by the nature of the data available. Hence, the central price tendency and the sale-based stratification methods which are internationally used measures were applied to the available zonal-level dataset from a survey of selected urban cities from the six geopolitical zones of the country. While the central price tendency was used to track changes in the price of the median residential dwelling sold from one period to another and the zonal shares of residential property prices, the sale-based approach was used to estimate the trends in the year-on-year growth rate of residential property price indices and the zone-wise price indices. On the whole, the results show a reflection of changes in the composition of residential dwellings sold in Nigeria from 2010 to 2012. The need for housing policy that will empower a comprehensive documentation of all attributes of price determinants for evaluation of residential property in Nigeria was emphasized.


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