Assessing the impact of selected macroeconomic variables in the determinants of sustainable residential housing prices in Lagos

Abstract

This paper examined the effects of some selected macroeconomic variables on residential property price in Lagos. Data were collected from Estate Surveyors and Valuers using the simple random sampling technique and Central Bank of Nigeria (CBN) Statistical Bulletin. The semi-log form of regression equation model was employed to determine the degree of relationship between the identified dependent and independent variables. Findings showed a positive impact of some independent variables in the determination of residential property price. This is evidenced by the interest rate possessing a t-value of 1.020, 1.236 and 1.512 while exchange rate with a t-value of 5.537, 6.845 and 8.822 denoting their influence as they are positively correlated towards the determinants of the prices of block of flats, detached house and duplex respectively. It was also revealed that fluctuation in the macroeconomic variables can lead to a corresponding change in the price of the residential property. It was recommended that financial institutions needs to reduce their lending rates to encourage investors.

Keywords: Macroeconomic variables, Housing price, Economic development, Determinants