After the independence of Ghana, the country has established different housing policies but the country seem to wallow in the shadows of housing deficit. Since independence, the country has
had consistent housing inadequacies.
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Property management is an act of intermediation between owners and occupies on issues affecting the parties arising from ownership and occupation of buildings. It is a conscious process of guiding and tailoring an investment in land into profitable venture. Its main concern is the optimization of the owners investment (Scarrett, 1995). The practice is however prone to a lot of problems which are capable of preventing or at best reducing the chances of realizing anticipated investment objective. In other words, the achievement or success of the art of nursing and directing an investment in landed property with a view to obtaining maximum return is a function of how well a property manager is able to effectively prevent and/or overcome seeming obstacles in the course of the discharge of its duties. As different from commodity, the deliverable in property management is service. The property manager advises the client concerning the general client policy regarding cooperation and compensation and as to the best and appropriate choice of tenants for the building. He takes decision on the best term of lease arrangement and appropriate terms of renewal. In addition to being aware of pending or enacted changes in the zoning ordinance that might affect the market value or use of property being managed, he should be informed as rapidly and thoroughly as feasible about laws, proposed legislation, government regulations, public policies and current market conditions.
Property managers seem to be of more relevant in the current economic dispensation. The global collapse of the capital market with its attendants effects, which has not spared African countries like Nigeria, are seen to be compelling investors to redirect their investment ventures into real estate, especially with visible foreign and local investments in commercial properties. These are properties acquired for the purposes of yielding regular inflow of income to investors. Commercial properties are often relatively large and complex buildings some of which are multi-storeyed or high rise type. The complexity involved in terms of the bigness of the structure and diverse and multiple occupants informed the need for specialized skill and training for efficient and effective service delivery.
The many and varied duties of a property manager require the skills of a business executive, decorator, salesperson, parking lot attendant, gardener, housekeeper, information center, accountant, banker, doctor, lawyer, social director, psychologist, marriage counselor, baby sitter, bookkeeper, rent collector, maintenance expert, security officer, keeper of the keys, telephone operator, messenger service, and complaint department. The manager must also be softspoken, fast-moving, poised, quick-thinking, non-tiring, ever-available, mechanicalminded, all-knowing and never-ailing. This “expert” knows how to visit without visiting, sell without selling, see without judging, hear without repeating – and all without having time for an uninterrupted meal. The property manager has a dual responsibility: to the owner or client who is interested in the highest return from the property; and to the tenants, who are interested in the best value for their money, including reasonable safety measures and compliance with fair housing laws.
Property management, according to Scarett (1995) must be based on the terms of the contractual agreement between the parties on the one hand, on an appreciation and interpretation of the particular owners objective on the other hand. This thus requires a high degree of compliance with the provisions and terms as well as performance on the part of the parties. The in-ability of any of the parties to perform fully or in part his/her own part of the agreement brings about management problems. Management problems hinders effective operations of property management activities. Depending on the magnitude of the problems, ineffective service delivery could bring about client dissatisfaction as well as prevent the achievement of the owners’ investment objective(s). The ‘expert’ property manager could therefore be seen to be negligent and/or incompetent if unable to achieve the objectives of income generation which is the main goal of an investment in commercial property.
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Togglethe effect of environmental degradation on property values in Ikom Urban
CHAPTER ONE
INTRODUCTION
Background to the Study
Generally, speaking problems with environmental degradation are often linked with process of development and therefore have effects on local, regional, as well as global levels. These effects which are the result of human activities have devastating consequences on the environment and so are harmful on human beings, animals and plants and can be passed on to future generations. (Acho, 1998; Danish International Development Agency, 2000; Kjellstrom and Mercado, 2008). In the face of global economic recession environmental degradation poses a great challenge to sustainable development. There are many problems, challenges and opportunities associated with living in the environment today. The earth and its treasure base, is experiencing a siege from all aspects of human endeavours ranging from misuse, abuse and degradation of the environment that have become so easily spotted and there are disruptions every day and almost everywhere. Cultures, economic activities, cultural behaviours and livelihood practices are changing and changing fast as a consequence of the realization that when people have power to extract resources around them for a more fulfilling life, they sometimes unleashed such power with a sense of desperation to solve the increasing and mounting problems of survival and progressive improvement and this leads to environmental degradation. Thus, the desperate quest for self, family or organisational improvement is no longer a future threat but real threat for the future. To look up to the future with optimism, depends to some reasonable extent on how we are able to set the stage for tackling environmental degradation problems of today. This requires an intelligent and well co-ordinated balance has to be maintained between integrated socio-economic development on the one hand, and lifelong preservation of human life and natural resources of mother earth on the other. Human beings are an end in themselves while every other thing is seconded to it without compromising the integrity and sanctity of the human species on earth. It is worth mentioning here that whenever there is an exhibited mismatch between human production systems and practices, and specific attributes of the resource base of the environment, a reversal of such inhibiting mismatch becomes imperative for the restoration of ecological balance. Over the years colonial, military, as well as civilian administrations in Nigeria have not given the required attention needed to environmental issues. As a result of the afore-mentioned environmental resources and their harmonious relations with nature have suffered dire consequences for decades and this remains one of the most intricate problems in Nigeria. Examples of these environmental hazards which have suffered neglect include the gully erosion in the east, the seemingly devastating effect of solid mineral mining on the plateau and the encroaching of desertification in the north to mention a few. The effect of this neglect can be further seen in the Niger delta geopolitical zone of Nigeria where gas flaring and oil spillage in the Niger Delta has wrecked tremendous damage on eco system, health and livelihood of the people. Thus, exploitation of finite and renewable resources of the environment which was meant for sustained economic growth and development has turned out to be a curse. At inception intense exploration, exploitation and consumption of these resources were effectively contained within the carrying capacity of the environment and its renewable potential. However, with passage of time, teeming population, sophisticated technical progress and their overall impact and pressure on the environment, a rethink began to emerge. The challenge in the contemporary situation remained that of a clear need for regulated control of the living environment based on principles of sustainability. It has become evident that the paradigm shift from sustained development to sustainable development in the light of global environmental concerns becomes an imperative. The pressure of demands made on living and finite resources has risen to a height where the former development styles, processes and their products are now inappropriate and incapable of coping with long-term human demands. Essentially therefore, sustainable development has become the enigma for our common future. Pressure placed on the carrying capacity of the earth and its resources is reaching an alarming proportion and now at the front burner of development and environmental issues. In Nigeria for instance, there is both cultural diversity and ecological diversity. With about 250 distinct ethnic nationalities, the ecosystems range from the southern mangrove swamps, rainforests to savannah woodlands, and semi-arid Sahel regions in the north. The country is characterized by varied landscape, climate, soil, vegetation and regional dichotomies. Indeed the country can be studied as a paradigm of the paradox of development in Africa. There is rapid depletion of and degradation of the ozone layer, soil resources, as well as air and water pollution, amongst others in the world. Pollution and deforestation, soil erosion, oil spills, toxic dung and uncontrolled human activities make the environmental situation a grave one. These environmental problems are products of development activities.
This means that the ecology and economy are co-present challenges of our time. This can be seen in the drastic fall in food output as a result of soil infertility, gully erosion which is rampant in present times. The aforementioned problems threaten human existence, and life expectancy rate in Nigeria on a daily basis. This paper therefore aimed at examining the nexus between environmental degradation and sustainable economic development of Nigeria. The paper examined the impact of environmental degradation on economic development of Nigeria. To achieve this purpose, the paper has been structured into six sections with the introduction as section one. Section two dealt with conceptual issues on environmental degradation and economic development. Section three briefly looked at the situation in Nigeria. The section four discussed the impact of environmental degradation on the Nigerian economy. The section five dealt with policy recommendations and section six is the summary and conclusion.
The aim of this study is to evaluate the effect of environmental degradation on property values in Ikom Urban
In order to comprehend the issues relating to environmental degradation on property values, this research laid three questions as follows.
Does environmental degradation has any effect on property values in Nigeria>
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Real estate development helps in creating employment, providing shelter to families, promoting distribution of income in an economy and lessening poverty. Real estate property is property made up of a mix of land, buildings, and natural resources sitting on the land, flora and fauna (Muli, 2013). Real estate development involves purchase, management, ownership, rental land or sale of real estate for profit (Abraham, 2009). Real estate investments relative to other form of investments is illiquid, demanding in terms of capital (although capital can be secured through mortgage) and highly dependent on cash flow. If the variables influencing the investment growth are not well mastered and controlled by an investor, investment in real estate is significantly risky (Geoffrey, 2011).
Theoretically, the investment theory endeavors to explain investment shift by investors. The theory states that individuals are for utility maximization, always switching from one investment to another primarily due to risk difference even though returns may be the same (Markowitz, 1958). Where real estate offers better returns given its moderate risk, then investor will prefer switching their investment to this sector hence contributing to its growth. Solow-Swan theory on the other hand posits that an output of an economy is directly proportional to the existing knowledge. The models ignore the impact of natural resources including land in determining output of an economy and views production as a function of Labour, Capital and knowledge. New growth theory was an improvement of neoclassical growth theory where unlike in neoclassical theory, progress in technology was considered part of the production function. The endogenous theories primarily seek to explain source of technological driven productivity growth.
The Nigerian real estate property market comprises of all property classes from houses occupied by a single family to those inhabited by many families, commercial land, Agricultural land, office space, go-dawns and warehouses, shopping complexes and retail shops (Masika, 2010). However, Nigeria’s real estate sector continues to lag in fulfilling these fundamental roles due to various factors affecting the sector including the pursuit by most Nigerians to own houses, increased migration to urban areas, increased remittances from Nigerians living in diaspora among others. Consequently, prices of properties in urban setup have skyrocketed. Government investment in heavy infrastructure such as the construction of Thika Road and Mombasa road has led to fast development of properties in the served areas due to improved demand price. It’s therefore important to examine factors that support investment growth to inform policies that would sustain future growth of the sector (Muli, 2013).
Real estate property comprises of land and all else that is permanently affixed to it. Real estate can also be defined as part of individual’s estate comprising of realty, where estate refers to total individual worth (Brueggeman & Fisher, 2008). Solnik and Mcleavy (2009) describe real estate as a form of intangible asset one can touch, see and feel, as opposed to financial instruments claims. Real estate falls under four broad categories; Residential, Agriculture, Commercial and Development Real estate (Michigan State Tax Commission, 2013).
Real estate industry, like any other industry, undergoes continuous evolution. Rural urban migration has been noted to be key demand driver of both residential and commercial properties in Nigeria and world over (Kimani et al., 2016). Consequently, demand and supply mismatch occurs. The sitution is aggrevated by inefficiency on the supply side as a result of challenges ranging from lack of financing mechanism and loan capital, unfavourable interest rates, low earning levels by the general population, cost of building materials and issues of land acquisition in Nigeria.
Real estate development can be measured through a number of approaches. One of the approach is to use securities exchange stock price indices. Indices are commonly used as benchmark when measuring shares and fixed interest stock performance (Barkham, 2012). They are applied in the property market but in a limited scope as compared to stock markets primarily due to unavailability of data. Owing to the subjectiveness of many approaches used in valuing properties, Ideally property index should be derived from a large sample free of influence from any one institutional investor where income, capital performance and total performance are segmented and considered separately for each property category.
Alternatively, the market value can be used to measure performance of property in the market. The value placed on a property is a major determinant of its performance. The value may be either market value or fundamental value. The fundamental value being the property value attached to a property by the owner and which does not in many instance relate to the market, Thalmann (2006). The market value is the value market places on the property.
Normally, property indices are produced by industry players such as investment firms with significant market share or government valuing agencies. In real estate sector, indices are
produced by real estate investment firms e.g. HassConsult Real Estate Ltd. Specifically, the Hass composite Sales Index is a measure of asking property sales price, based on a Mixed Adjusted Methodology.
Economic growth can be defined as the increase in the total output of an economy and can be measured using gross domestic product (GDP) with a finality aim of enhancing standard and quality of life among the populace. This happens when the output per capita outgrows population, Case, Fair and Oster (2012). Haller (2012) defines economic growth as process of growing the sizes of countries’ economies, the macro-economic indicators particularly GDP per capita, systematically and that results to a positive effect on the social-economic sector. Thus, economic growth is the expanding of a country’s economy.
Growth in a given economy can be measured using GDP, which estimates market throughput by summing values of final goods and services created and exchanged for money within a given time period, Costanzaet al.,(2009). Subsequently, the rate at which economy grows is defined as the percentage change in the produced quantity of goods and services from one year to the next (Keithly, 2013).
The effect of property market developments on growth of an economy has attracted interest for the longest time. This may be due to the role housing plays in a Country in providing one of the basic need to its population; shelter. While this is an important sector to a country’s growth plan, particularly in addressing the ever increasing urban population
resulting from among other factors rural-urban migration, its contribution, or lack of it, to economic growth remain unclear.
The change in real estate prices as a result of wealth effect may affect an economy. A hypothesis by Friedman on permanent income suggest that people are likely to change their desired consumption if prices of houses affect their target lifetime wealth (Norman, 2011). Investment theory endeavors to explain investment shift by investors. Where real estate offers better returns given its moderate risk, then investor will prefer switching their investment to this sector hence contributing to its growth (Markowitz, 1958). Solow-Swan theory on the other hand posits that an output of an economy is directly proportional to the existing knowledge. The models ignore the impact of natural resources including land in determining output of an economy. New growth theory was an improvement of neoclassical growth theory where unlike in neoclassical theory, progress in technology was considered part of the production function. Hence, progress in technology contributes to the overall output of an economy.
Various studies suggest that there exists a direct relationship between real estate and economic growth. Ho and Wong (2008) in Hong Kong while assessing the effect of prices of house on private local demand found that booms in housing market significantly augmented domestic demand. Studies by Ludwig and Slok (2004) and Case et al., (2005) reported existent of relationship between price of properties and the consumption in the USA and several other OECD economies. Leung (2001) investigated consumption and investment channels in Hong Kong and found that the two channels significantly responded positively to prices of property.
Conversely, a study by Peng, Tam and Yiu (2008) in China found effect of wealth on consumption as negative and to be of statistical insignificance. Delong (1992) and Long and Summers (1991) suggested that investment in buildings has insignificant relationship to GDP growth when using purchasing power parity adjusted data. Green (1997) and Podenza (1988) view is that residential real estate investment just like interest rates and prices of stock is a good predictor of GDP. Delong (1992) and Long and Summers (1991) suggested that structural investment has no relationship worth noting with GDP growth when using purchasing power parity adjusted data.
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