TRENDS IN RENTAL VALUE OF RESIDENTIAL PROPERTY IN AN EMERGING STATE CAPITAL. (A CASE STUDY OF OSOGBO, OSUN STATE)

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF THE STUDY

As far a real estate is concerned, value goes with the same economic laws as values of other goods and services. Therefore, value of real estate relates its basis to the law of demand and supply just as price of commodity in the market. The other underlining factors that guide residential property market in the study shall also be highlighted. Value is the worth of and article in exchange. The money worth that will accrue to the lesser will be and inverse function of the value of demand, long time age especially in the days of oil boom, the property market of the area was dull because people prefer to build than to let or lease because building cost was cheap. But, in the decade the property market of the study area has experienced gradual changes in rental value.

The nature of this change is the focus of this project, the concept of values of property factors affecting property values and some other related topics will be treated

Various factors that can being about changes in residential property values and a graphical representation was made which showed a monumental changes in their rental values when compared the present year.

Osun became state in August 27th 1991 in the sixth year anniversary broadcasting of President Ibrahim Babaginda. The state was one of the Nigeria new states created in 1991 others are Abia state, Kebbi state, Kogi state, Delta state, Jigawa state, Enugu state, Yobe state and Taraba state. Before this time, the state was part of old western Region and later became part of the Old Oyo state before it finally became a state today. Most of the towns and villages in Osun State of today are as the country itself

The state capital is Osogbo with a total number of thirty local government councils. Among the major towns in Osun state are Osogbo, Ilesah, Ile-Ife, Ede, Ilaorangun and Egigbo among others. The state has a total land of 86002 square kilometers and share boundary with Kwara in the North. Oyo in the west, Ogun and Ondo in the South and Ekiti in the East.

The national figure of 1991 put the state population as 1,144,907 Male and 1,193,663 Female. With the population density of 233 and in 2006, the total population is 3,423,535 with the population density of 379 and the current population density is 4,000,000.

Before the inception as the state capital does not harbor much number of people but since the inception as the state capital the number of people increased and many environment, economics and development changes occurred hence, the introduction of banks and industries spring up which lead to the growth and expansion of the state, the rental value increases to a great change to the physical and economic activities in Osun State. The state was blessed with abundant deposited of natural resources such as Gold, Clay, Limestone and Granite.

The state expansion of tropical climate while the local natural vegetation is the lowland rainforest types.

Owa Laorooye (Laro) and Oguntimehin (Timehin) both co-founders came from Ipole, the original homestead of the earliest settlers, around 1650 and 1700.

Timehin was a great hunter. He had mad e several expeditions to the Osun forest during which he discovered Osun River whose water never dried throughout the year. The presence of Osun River and other physical features of the area impressed Timehin. Back at Ipole (located some 12 kilometers from Osun River and which had been experiencing acute water shortage), he informed Owa Laorroye of his adventure, discovery and conviction that if they shifted their abode to the area, the problem of water shortage would be solved. After due consideration, Laro, Timehin and their people left Ipole to settle along Osun River.

            Legend has it that when a tree fell into the historic River, a voice complained and pleaded. Spirit of the forest you have broken all my dyeing pois move power from here so that you may prosper. Aro and Timehin were said to have replied in fear Osogobo ode o, which translate into the spirit of the forest sorry. The two men believed the voice to be that of the Osun goddess. From that day, the settlers called their abode Osogbo which was perfected to OSOGBO. The spot where Osun River is worshipped today was where Osogbo people first settled. Following the Osun goddess complaint and Advice, the first settlers Oba Larooye and Timehin and their people moved upwards as directed to where the first historic palace in Osogbo is now situated.

1.2. AIM OF THE STUDY

The aim of study is to examine the trends in the rental value of residential properties since the creation of Osun state.

1.3       OBJECTIVES OF THE STUDY

1. To identify various factors that responsible for trends in rental value of residential properties
2. To examine the rental value of residential properties in the study area.
3. to identify various problems militating against the performance of  residential properties in the study area.
4. To make recommendations and conclusion.

1.4       JUSTIFICATION OF THE STUDY

In ascribing any rental value to any set of property the future level of productivity of the property have became a thing of significance. So one of the things to which the developers are most sensitive is the feature level of rental. A small amount of the balance in prediction can have great effect in the success or failure of a project. This as a guide to viability of a development scheme, it is important that feature levels of income generated from the property must be highly granted.

In doing this, decision which affects the feature has to be taken into consideration. But before this can be done, it is necessary to make allowance for condition that would show ahead. Since current rental on investment as mainly aims at meeting feature needs of the owner.

Residential property in its nature is more or less dynamic thus a study of past trends of the property in the market would serve as a useful guidelines to the whole state be it investors. This enable public as well as private developer know how their scheme fit into future development of the sub-growing urban area as a whole.

The study of trends of property values most especially residential property is of great importance to the estate management profession. An understanding of trends on property value is great importance for their being assessment purpose or valuation.

This is because it provides a good guide and it can be used for projecting such things as revenue generation, either for the state or local government. An understanding of the trends in rental value of a property, particularly residential property, in most cases it can also be used to determines the capital value of the property in the nearest future and also the actual rent to be taken by the landlord, could be determined if an accurate trend can be got.

1.5       SCOPE OF THE STUDY

Basically, the project propose to examine the trends in rental value of residential property within the state. Although the estate belongs to the Government which ahs vested interest into the individuals who developed the respective property. The respective landlords who pay the corporation an annual ground rent now lets out their property for over years

In this project a critical examination will being made on the responsible factors and forces causing changes in rental value of residential properties.

1.6       RESEARCH METHODOLOGY

During the course of this study, data and other important materials were collected in the following ways,

1. Reference to relevant books and journals
2. Oral interview in connection with the study was carried out within the study area.
3. Field survey of the study area.

1.7       LIMITATION OF THE STUDY

The major problem we encountered was that Osogbo is a large area with many estate surveyor and value firm, location at relating short distance from each other as had to result to trekking from one firm to another and also some of the estate surveyors and values were not willing to answer the oral interview conducted because of their tight schedules.