Determinants of Residential House Rental Prices in Accra Metropolis

Abstract

The study analysed the effect of neighbourhood characteristics and structural characteristics on residential rental prices in the Accra metropolis of Ghana. This is in response to the absence of scientific approach to determining rental prices and as a way to influence policies to deal with the arbitrarily fixing of rental prices. Multiple regression analysis was employed in analysing data sourced primarily from tenants of residential houses. The study specified four regression equations, linear, linear-log, log-linear and log-log. The different regression models were found to have different effect on the relationship between house rental prices and its influencing factors. However, the log-log mode and linear-log model revealed similar results, both models revealed that distance from church or mosque to a residential property were significant and positively related to house rental prices whilst all other variables were insignificant. The linear model and log-linear model also showed some similarities. In both models distance to central business district, distance to market, electricity supply, refuse dump, wooded area and urban effect were significant with the same signs in both models. However, single household was significant only in the linear model but not in the log-linear model whereas in the case of the log-linear model variables such as distance to church or mosque, park within fifty metres and uncovered drains were significant but insignificant in the linear model. The study concluded that there is a significant relation between house rental prices and neighbourhood characteristics as well as structural characteristics of a residential property.