Customizing a mass appraisal model for residential property tax assessment: a hedonic regression approach in Bahir Dar city, Ethiopia

Many studies have unveiled the importance of variation in residential property values overtime, but failed to cover different types of residential property value and location. The aim of this research is therefore to model residential property rental value in Bida from 2015 to 2020 with the aid of Geographic Information System (GIS). The study focused on the rental values of the residential property and rental value variation across space. Data collected for this paper includes residential rental values and geographic coordinates from 196 residential properties in the study area, comprising 101 one-bedroom, 80 two-bedroom and 15 three-bedroom apartments. Inverse Distance Weighted (IDW) interpolation tool of ArcGIS was employed in analyzing the data. It was found out that the core areas of the town commands lower rental values while the southern part of the town commands higher rental values. It was also found out that one bedroom apartment is the most dominant residential rental property followed by the two bedroom apartments and three bedroom apartments respectively. Geospatial database was produced for each model in a bid to ascertain the level of changes with time. The benefits associated with the application of GIS technology were established by this research and recommends its application to other property values modeling.

The supposition that the occurrence of flood event will have an inverse effect on rental values of residential housing properties is often accepted as a fact. However, the mechanism for this supposed impact has not been clearly articulated and the hypothesis is far from proven in Ghanaian housing rental market. This paper examined the impact of flood on residential rental values in Kumasi. The study adopted multiple research approaches in selecting zones with both flood and non-flood liable residential properties. The repeated sales model was then used to create local market indices to gauge flood impact on the rental values. The rental values of non-flooded residential properties were generally higher than their flooded counterparts by a margin of GHS 62.66 ±0.09 annually. While this supports existing postulations of a negative impact of flood on rental values, the results further showed that the extent of the impact varies across different residential property types. It is concluded that the wholesale assumption in literature that flood events diminish rental values should be interpreted with caution. The study recommends that the (dis)amenity effects of flood on rental values should therefore be assessed on case by case basis.Keywords: Floods, Ghana, Kumasi, Residential Rental Value, T-test

Purpose– This paper adds to the emerging knowledge base in the Nigeria and is of relevance to all residential property stakeholders. A number of empirical studies have demonstrated that several factors influence residential property values. However, there is a paucity of empirical research on critical factors influencing rental value of residential property in Nigeria. The purpose of this paper is to serve to address this gap by examining critical factors influencing rental value of residential property in the three densities area of Ibadan metropolis, Nigeria.Design/methodology/approach– The study used random sampling to select 624 residential properties out of 3,120 residential properties in the portfolio of 52 Estate Surveying and Valuation firms located within Ibadan metropolis, Nigeria. Data collected were analysed using a hedonic pricing specification.Findings– The results show that different critical factors influences rental values of different types of building in different residential densities. Number of bathroom (NOB), number of living room (NOL) and existence of burglar alarm (EOBA) were critical to bungalow in the whole area of Ibadan while number of toilet (NOT) was critical to duplex. In low-density area; residential location and EOBA have a significant positive impact on rental value of bungalow while NOT, NOBs (NOR), NOL and EOBA have a significant positive impact on detached house. However, it was NOR and EOBA that were critical in the medium density to bungalow.Practical implications– The study concluded that each of the residential densities is homogenous and, therefore, every residential property stakeholders should recognise the importance of each factor on rental values so that their valuation estimates will be useful and reliable.Originality/value– The study is one of the few attempts at examining factors affecting residential property value. This paper examined critical factors influencing rental value of residential property in the three densities area of Ibadan metropolis, Nigeria.

This paper examined the response of rents from residential properties to the siting of Global System for Mobile (GSM) Communications’ masts in various residential zones in Akure town. The study employed survey approach in order to understand the relationship that exists between location of GSM masts and rental values offered on proximate residential properties within a 300 metres radius of GSM masts. The town was divided into high, medium and Low density zone; and three GSM masts were selected from each of the zones for the study. In all, a total of 180 questionnaires were administered on residents within the radius and 139 (77.22%) were retrieved and good for analysis. Regression analysis was employed to determine the causal effect of GSM mast on the rental values of neighbouring residential properties in the study area. The findings revealed that the location of GSM mast has no significant effect on rental values of residential properties in the high and medium density residential zones of Akure. This is attributable to the fact that demand for residential properties in town is generally very high, and the residents are left without much choice due to attendant high rent charged on existing residential properties. However, there exists a positive effect on rental values of properties in the low density zone. There is need for the Nigerian Communications Commission (NCC) to follow the global trends on new findings about health implication of siting of GSM base stations around residential neighbourhood and ensure that international standard of safety is strictly adhered to by the operators in Nigeria. DOI: 10.5901/ajis.2013.v2n3p147

The contribution of environmental attributes in residential price determination is premised on the issue relating to inefficient attributes pricing. The study analysed three environmental attributes such as structural, neighbourhood and natural attributes of the environment with a view to determining its hedonic value upon which residential property price is derived. In order to achieve the aim of the study, a sample size of 2401 was drawn out of 104166 properties using estimation method; 50% estimation rate and precision range of ±4 were adopted in estimating the sample size. The study administered two set of structured questionnaires; one to Estate Surveyor and Valuer firms to collect data on rental values (2008-2019) and second questionnaires were administered on the respondents to collect information on condition of environmental attributes using the census and simple random sampling method technique. Hedonic regression was employed to analyse the data. Environmental attributes were scored based on current condition and ratio scale was used alongside the average property value. The result revealed that neighbourhood attributes contributed between 60.3% -71.6%, natural attributes contributed between 60.3%-71.7% while structural attributes contributed between 66.8%-75.1% in determining the property values across the selected areas. The result of mixed regression analyses further revealed that environmental attributes contributed about 70.1% in determining the value of property in the selected areas. Environmental attributes such as natural and man-made water supply, road, quality wall-structure and floor, landscape, bathroom and streetlight contributed significantly in the determination of property values across the study areas. The study therefore concludes that the value of environmental amenity should be captured in the price of residential properties close to it. It is recommended that every stakeholders in the built environmental advocate for quality and even distribution of common environmental facilities that are key to development of property market in Nigeria.

PurposeThe paper aims to examine the influence of urban violence on residential property rental value in Kaduna metropolis. This is motivated by the spate of insurgency and the attendant destructions of land and properties in the past few years in the study area.Design/methodology/approachThis paper adopted a survey of key sites of urban violence and also a total enumeration of all the 67-estate surveying and valuation firms in the study area to elicit from them vital information on trends on rental from 2011 to 2019. The data obtained were analyzed using both descriptive and inferential methods of statistical analysis.FindingsThe result of this study revealed that among other sources of urban violence, violence fueled by ethnic affiliations/convictions is the only significant factor that influenced rental value of residential property in the study area. The regression analysis shows that ethnic violence accounted for 21.6% of the variability observed in residential property rental value over the period of study. Furthermore, the correlation result showed that ethnic violence is negatively correlated (−0.458) and significantly related to residential property rental value.Practical implicationsThis study concluded that the emergence of urban violence in Kaduna metropolis contributed to a fall in the rental value of residential property in the study area. This study thus suggested policy directions that could engender harmonious coexistence among different ethnic groups in the study area.Originality/valueThis study is expected to enhance improvement in residential property rental value in Kaduna metropolis through increase assurance to security of lives and property.

There are various purposes the rental or capital values of residential investment property could be sought. However, most previous studies on factors influencing value of residential investment property are expressed in a general term; not specifically indicating whether rental or capital value. This may mislead investors in making the wrong investment decision. Using aggregation and disaggregation approach, this study examined the general and specific factors determining the rental and capital values of residential investment property in Abuja, Nigeria with a view to providing information that could guide the investment decisions. With the use of a structured questionnaire, cross sectional survey was adopted to obtain the perceptual opinion from 136 estate surveying and valuation firms in the study area. Data was analyzed with descriptive statistics of Relative Important Index (RII). The findings reveal a variation in the outcome of general factors and specific factors and that in specific term, factors influencing the capital value are significantly more in quantity and rating than the ones influencing the rental value. Out of the 23 (13 for rental and 10 for capital value) general determining factors, 11 (3 for rental and 8 for capital value) are actually significant. Average number of rooms; change in maintenance cost/taxes and the neighbourhood characteristics mainly influence the rental value of residential property while cost of construction; type of structure/quality of facilities; potential of rental growth; title and size of the land; neighbourhood attributes; inflation impact; size and structural characteristics and state of supply in property market are the main factors influencing the capital value. This noted variation is an indication for property investment stakeholders to be cautious and specific in the selection of the most appropriate determining factors for their investment objective to avoid investment decision errors.

PurposeThe purpose of this paper is to find out the factors affecting rentals of residential apartments in Pune, India.Design/methodology/approachFour regression models are developed, i.e. basic ordinary least square (OLS) regression model, OLS regression model with robust estimates, OLS regression model with clustered robust estimates and generalized least square (GLS) regression model with maximum likelihood (ML) robust estimates. Based on the Akaike information criterion and Bayesian information criterion criteria, OLS regression model with clustered robust estimates and GLS regression model with robust estimates are best fit. The data are tested for multicollinearity and the models are tested for heteroscedasticity. The study uses the expected rent value data collected from Web portals and the data on factors affecting the rental value of residential property are collected through the study of land use maps, Google earth software and field visits.FindingsTotal floor area and number of rooms are structure related factors that positively affect the rental value, i.e. more the area and number of rooms, higher the rental value. The distances from the nearest police station and fire station are security and safety factors. The results suggest that higher distance from these factors leads to lower rental values, as safety and security is the top priority of residents seeking residential property on rental basis. The distance from employment zones, distance from nearest school/college and the distance from the nearest public transport terminal are convenience related factors that negatively affect the rental value, as greater the distance, lesser the rental value and vice versa. The distance from Central Business District and hospitals has a positive effect on the rental values of a residential property implying that higher distances from these places command higher rental value.Research limitations/implicationsThe study relies on rental data that owner is expecting for a particular property, it is not certain that the property would be actually rented for the same value. Second, researchers had to drop certain important drivers of rental value because of the issue of multicollinearity.Practical implicationsThis is one of the rare studies conducted in Indian context, and the findings of the study are useful from the owner, tenants, urban bodies and developers’ point of view. Knowing that India is one of the fastest growing markets and need for housing is increasing day by day (including housing facility on rental basis), the stakeholders need to take care of the factors that affect the rental values of a residential property.Social implicationsThe authors suggest the governments and the municipal bodies in India to come up with a public rental housing policy that separately caters to the needs of the lower income group, middle and upper income group in at least metros, tier I and tier II cities that are witnessing unprecedented growth in job seeking immigrants, who are seeking properties on rental basis. While developing a public rental policy, they must keep in mind the factors that are driving the rental values, such as proximity to employment zones, proximity to proper school and college, efficient public transport system as well as all safety and security measures. Creation of such a public rental policy is a win–win situation for immigrants, property owners and government/urban development bodies.Originality/valueThis paper is the first empirical study about the factors affecting rental values in Pune, India. The study will help property owners, immigrant and local tenants, government and urban development bodies to develop an understanding about the important factors affecting rental value and come up with their respective plans. Advanced econometric regression models are used based on the data that is collected through actual field visits, study of maps and secondary information rather than use of survey method or creation of dummy variables.

Problem statement: Real estate developers were consistently faced with the issue of making decisions on the types of property to invest their hard earned income or highly competitive secured mortgage funds, which were attached with high lending rates. One of the different sectors that are begging for such investment is residential property development. Approach: This study evaluated the effects of available infrastructure in residential property on its rental values in Akure, Ondo state, Nigeria. Two different sets of questionnaires were designed and administered for the collection of primary data used in the study. The first set of questionnaires was for the tenants of residential property while the second set of questionnaires was administered on the practicing estate surveyors based in Akure. The questions in the questionnaires amongst others probed into the types of available infrastructure in the rented apartment, rent paid, income of household-heads and family size. Primary data collected were subjected to multiple regression analysis and the determination of the effects of each of the available infrastructure (water, electricity, access road, kitchen, toilet, refuse disposal facility, wall fence, installed burglary proof, drainage channel, daywatch-security and nightwatch-security services) on the rental value was achieved. Results: The study revealed that infrastructural facilities contributed 30.50% in the determination of rental values of residential buildings in Akure; of which the provision of wall-fence round the building and the installation of burglary proof in all the windows played the most important infrastructure. Conclusion: Property developers that want to invest in residential buildings development should endeavour to provide these two infrastructure amongst others with a view to earn attractive rental values on their residential property in Akure in particular and towns and cities in developing countries.

This study investigated how the benefits of a walkable neighborhood were reflected in the American real estate market by examining the economic values of urban environmental factors supporting walking activities. Property values were used as a proxy measure for economic value and analyzed in relation to land use characteristics that have been known to correlate with walking at the neighborhood scale. Four aspects of the built environment supporting walking were included in the analyses: development density, land use mix, public open space and pedestrian infrastructure. Hedonic models were employed where the property value was regressed on the measures of the four sets of correlates of walking in a neighborhood. Models were estimated for four land use types – single-family residential, rental multi-family residential, commercial and office. The findings did not support previous arguments that increasing density weakens the quality of a neighborhood. To the contrary, the positive association of higher development density with the value of single-family residential properties detected in King County suggested that high development density might increase surrounding property values. The pedestrian infrastructure and land use mix significantly contributed to increases in rental multi-family residential property values. Higher development density with higher street and sidewalk coverage were also favored by retail service uses. In relation to land use mix, mixing retail service uses and rental multi-family residential uses helped make rental housings more attractive.

Due to the interplay between the forces of demand and supply in the determination of residential property investment valuation, there is continuous increase in rental value and rent review pattern and as such, conventional valuation of residential property investment has become inappropriate as it cannot handle the problems of rental values, rental growth, impact of inflation and rent review pattern experienced in the Nigerian property market. The objectives were to determine the annual rental growth rate pattern for residential properties from 2014–2020 and ascertain the level of variation in the use of conventional and contemporary investment methods in determining the value of such real estate assets in Lagos State, Nigeria. Appropriate descriptive approach was adopted and the result showed that rental values increased within the period, rental growth followed a similar trend, rent review pattern was mostly three years, and practitioners were aware of discounted cash flow. Valuation results revealed 6.67% variation for discounted cash flow, 0% for real value model and 25% rational approach. The use of a constant income annuity in perpetuity for conventional investment method of valuation as a single income stream would result in erroneous valuation as conventional technique relies fully on comparable evidence. The contemporary techniques on the other hand integrate property as part of the larger investment community which enables estate valuers to make qualitative market valuation where there is no comparable evidence. This study therefore recommends that contemporary valuation techniques are appropriate in the market valuation of residential property investments, particularly in the market valuation of reversionary freehold.

Over the past two decades, the Rumuolumeni community in Obio/Akpor Local Government Area of Rivers State has experienced significant urbanization, driven by the establishment of industries, a tertiary institution, and business hubs. This rapid development has increased the demand for residential accommodation of various sizes and typologies to meet the housing needs of the growing population. Consequently, this study examines the trends of 1bedroom and 2 bedroom flats on Aker Road Rumuolumeni from 2019 to 2023 providing insights to guide investors in making informed decisions. Data for this study were collected from estate surveying and valuation firms, landlords, and tenants using well-structured questionnaires. The collected data were analyzed using trend analysis, one-way analysis of variance (ANOVA), and relative importance index (RII). These analytical techniques were employed to examine rental value trends, assess the statistical significance of differences in rental values between one-bedroom and two- bedroom flats in the study area, and rank the factors influencing rental values based on their relative importance. The findings revealed that both flat types experienced slight growth between 2019 and 2020, and the growth spiked up the following year 2021. It was observed that the one bedroom flat recorded the highest growth at 61.03% while 2 bedroom flat recorded highest growth at 59.32%. Analyzing the rental values of the two property types to establish if there is a statistically significant difference in the mean rent paid on 1 bedroom and 2 bedroom flats within the study area from 2019 to 2023, it was observed that there was a statistically significant difference between the mean rents of the two residential property types. The finding further revealed the top 3 factors that impact rental value in the study area as cost of building material (RII 0.86), siting of Ignatius Ajuru University of Education (RII 0.82), and good roads (RII 0.80), while the least 2 factors impacting on rental values from the list of 16 identified factors were: green building practice (RII 0.45), income level of tenants (RII 0.49). It was recommended that investors consider the development of more 1 bedroom flats than 2 bedroom flats because the former attracts higher rental growth annually.

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A class of differentiated products is completely described by a vector of objectively measured characteristics. Observed product prices and the specific amounts of characteristics associated with each good define a set of implicit or "hedonic" prices. A theory of hedonic prices is formulated as a problem in the economics of spatial equilibrium in which the entire set of implicit prices guides both consumer and producer locational decisions in characteristics space. Buyer and seller choices, as well as the meaning and nature of market equilibrium, are analyzed. Empirical implications for hedonic price regressions and index number construction are pointed out.

This study delves into the pattern and level of development of two adjacent border communities of Lagos and Ogun States, Nigeria to compare the effect on rental values of residential properties in the two communities. The study attempted to find out if there are significant differences as well as definite relationship between the values. Questionnaires were distributed to two groups of respondents which are 84 estate surveying and valuation firms in Ikeja, Lagos and 152 residential property owners/residents in the two communities. Data were analysed with statistical tools such as tables, percentages and mean. Student’s t-test statistics was used to ascertain the difference in rental values while Pearson coefficient of correlation was used to establish the degree of relationship. The importance of factors influencing rental values was determined using the relative importance index. Analysis were presented in percentages, tables and charts and then discussed. Result showed that there are significant statistical differences in rents of the two communities despite the proximity. It was further observed that neighbourhood density and level of infrastructure development play vital roles in the gaps observed in rental values. However, the Pearson correlation coefficient revealed that there is a relatively strong positive correlation between rental values of properties in the two communities. The research therefore concluded that for property market on the Ado-Odo/Ota side of the emerging Lagos megacity to attain its full potential, there is the need for major urban renewal, investment in physical and economic infrastructure via partnership with private sectors and property owner in the communities.