Structure and conduct of risk returns-characteristics of residential property investment in Kaduna metropolis, Nigeria

Abstract

Residential property investment is one of the most subscribed investments in the world. However, its risk-return characteristics is least understood especially in the Nigeria context. Though past studies have critically established the performance of mostly isolated  residential and commercial properties in southern regions of Nigeria. Disentangling and identifying empirically risk-return characteristic of residential property in Kaduna metropolis Northwest Nigeria is an unresolved challenge. This paper presents an empirical analysis of the performance of residential properties to gain a better understanding of the property market dynamics in Nigeria, survey research approach was employed to collect quantitative data required for the study. To determine residential property returns and asset risk, descriptive (weighted means, standard deviation and percentages) and inferential statistics were utilised. The outcome demonstrated that residential properties have diverse total returns and riskreturn characteristic. Furthermore, this study  established that total returns from residential properties ranged between 7.93% to 12.68 % and the risk features ranged from 2.37% to
6.81% among the classes of properties. The result demonstrates a direct positive relationship between total returns and risk profile. Hence, recommends that Malali market is the most desirable location for risk-averse investors.

Keywords: Risk- return analysis, residential investment, total return, portfolio, property