FIG Peer Review Journal


Revisiting the Interaction between the Nigerian Residential Property Market and the Macroeconomy (6466)

Ismail Ojetunde (Nigeria)
Department of Estate Management and Valuation
School of Environmental Technology
Federal University of Technology Minna. Nigeria
5 Professorial Quarters.
Bosso Estate
Corresponding author Ismail OJETUNDE (email: i.ojetunde[at], tel.: +2347033780000)

[ abstract ] [ paper ] [ handouts ]

Published on the web 2013-03-08
Received 2012-10-21 / Accepted 2013-02-02
This paper is one of selection of papers published for the FIG Working Week 2013 in Abuja, Nigeria and has undergone the FIG Peer Review Process.

FIG Working Week 2013
ISBN 978-87-92853-05-9 ISSN 2307-4086


Revisiting the Interaction between the Nigerian Residential Property Market and the Macroeconomy. Ismail OJETUNDE, Nigeria Keywords: Macroeconomy, property, property market, residential, rents. SUMMARY. The study of residential price dynamics and macro economic developments are important for virile economic and social policies formulation at both local and national scales. This paper revisits the interaction between the Nigerian macroeconomy and the operation of its residential property market using econometric analysis. By employing a larger sample and different data analysis approaches (pairwise correlations, cointegration, granger causality and vector autoregression) the objective is to provide further evidence on the extent to which the property market is integrated or linked to macroeconomy. Evidence suggests that macroeconomic variables (real gross domestic product, inflation, exchange and interest rates) have long term relationship with residential property rents in Nigeria. The results of the granger causality shows that both exchange and interest rates have useful information for predicting residential property rents over and above the past values of other macroeconomic variables. Aside, the result of the variance decomposition within the vector autoregressive model further confirmed that real GPD and Exchange rate combined forecast 31.4% of the variance in residential property rents. This study concludes that the response of the residential property market to macroeconomic shocks of interest rate, real GDP, and exchange rate implies a relatively slow adjustment of the property market to the ever changing macroeconomic events in Nigeria making long run equilibrium elusive. These findings are significant for the continued development of the Nigerian property market which is fraught with poor market information. CONTACT Ismail Ojetunde Federal University of Technology, Minna. Nigeria P. M. B. 65 Minna, Niger State of Nigeria Minna NIGERIA Tel: + 2347033780000 Email:
Keywords: Valuation; Property; Housing