Understanding the Fallout: The Impact of Failed Real Estate Developments on the Property Market in Lagos State, Nigeria

Abstract

This study aims to investigate the effects of failed real estate developments on the property market in Lagos State, Nigeria. Given the rapid development and high demand for housing and other assets in Lagos, the potential for project failures can cause uncertainty and disruption. The research seeks to understand the various consequences of project development failures on the property market by examining stakeholder views. The study involves analyzing the fundamental factors and outcomes of project failures and their impact on the real estate market in Lagos State. The study sampled 384 Estate Surveyors and Valuers (ESV) and 225 staff from the Real Estate Developers Association of Nigeria (REDAN). Regression analysis (OLS) was used to examine the impact of real estate development failure on the market. The study found that technical factors, also known as technical failures, had a significant negative influence on the real estate market in Lagos State. This conclusion was based on negative regression coefficients (-0.68 for ESV and -0.68 for REDAN) and significant t-statistics values (-8.18 for ESV and -4.90 for REDAN). Furthermore, factors such as inadequate project finance, lack of management support, failure to adhere to required regulatory guidelines, and socio-political factors also had negative regression coefficients. They were found to influence the real estate market in Lagos state. In conclusion, these factors could affect the quality of real estate development, leading to a decrease in the real estate market and patronage.