EFFECT OF POPULATION GROWTH ON THE DEVELOPMENT OF RESIDENTIAL PROPERTY IN WUSE ABUJA

EFFECT OF POPULATION GROWTH ON THE DEVELOPMENT OF RESIDENTIAL PROPERTY IN WUSE ABUJA

CHAPTER ONE

1.0       Introduction

1.1       Background of the study

The impact of rapid population growth on housing development in a developing economy is usually a consequence of the push of the rural areas and the pull of the town. There is always an upsurge and conglomeration of people in city centres with the resultant effects on housing growth arising from acute unemployment. This growth and physical expansion of cities have been accompanied by unplanned urban sprawl, environmental pollution, deterioration, deficiencies in modern basic facilities, and general urban decay (Akpakpan, 2017).

As increased poverty and urbanization exert more pressures on urban facilities, most Nigerian cities tend to have lost their original dignity, social cohesion and administrative efficiency. The relationship between population and housing is two-sided. On the one hand, population change leads to a changing demand for housing. Population growth, and particularly a growth in the number of households, leads to a growth in housing demand. Population decline might lead to a decrease in housing demand. This will, however, only happen in the long run, after not only the number of people but also the number of households has started to decline (Eric, 2015).

Residential property refers to building that is developed for people to live or undeveloped land that is designated for residential use. Residential properties could be a consumption goods, or investment goods (Sratton, 2008). As a consumption goods, it is acquired for owners occupation while as investment goods it is acquired for the purpose of deriving optimum return from outright sale or letting of the property. If this is the case, the price or rent of the residential property becomes very important to the seller and buyer or landlord and the tenant. Hence investment in this type of property is regarded as a considerable source of wealth for many investors.

Property development comprises a significant component of total Nigeria economic output. The property development process involves the continual combination of significant factors of production (land, labour, capital and enterprise). In addition, property development has been characterised by some significant cyclical influences as the process involves significant risk. It is in the interests of capital markets, market participants and the public sector that property development processes are better understood so as to ensure efficient allocation of physical resources, human resources and capital to meet the needs of the ever growing of population of Nigeria (Cadman, 2014).

The impact of rapid population growth on property development and conditions is far more than merely a demographic or quantitative one. Whereas the population growth and urbanization process in the developed countries was the result of rapid industrialization, the growth in Nigeria like most other developing nations is a consequence of the “push” of the rural areas and the “pull” of the town (Kehinde, 2010). The majority of African urban centres developed and continues to develop as commercial-administrative and servicing entities. In Nigeria like in most other developing countries, the growth of the tertiary sector is often a symptom of poverty and stagnation rather than economic development. Consequently, population growth in most of the African countries is characterized by a growing gap between employment opportunities and demand, and an ever increasing shortage of urban services and facilities which are accessible to a diminishing share of urban population. The implication is this deplorable and alarming situation which aggravates the already acute housing problem. It is against this background that this study seek to examine the effect of population growth on the development of residential properties in Wuse Abuja.

1.2       Statement of research problem

World population has risen to over 6.3 billion people and by 2030 over 60 percent of the world’s population is expected to be living in cities. There are now over 400 cities with a population of over a million people (UN-Habitat, 2015).  As population growth is an underlying factor for the demand of housing, without new supply of dwellings, it pushes up the prices for both renting and purchasing dwellings. The problem is further compounded in many of the large cities with a change in living preferences that has resulted in a fall in household rates, particularly in the western world. Hence, population movement to the city and fewer people per household means the supply of more housing is needed. The growth of the population in Abuja Municipal Area Council has assumed a geometrical proportion, the provision of urban infrastructure and housing to meet this demand is, not at commensurate level. This has resulted in acute shortage of housing / residential properties to the teeming population with. The extent of the housing shortage in Abuja is enormous. The inadequacies are far-reaching and the deficit is both quantitative and qualitative; even those households with shelter are often subjected to inhabiting woefully deficient structures as demonstrated in the existence of slums and shanties in and around the city of Abuja. They reside in the slums and squatter settlements scattered around the city and are predominantly engaged in informal economic activities which encompass a wide range of small-scale, largely self-employment activities. This problem can only be brought under control through urban consolidation and/ or development of properties in the urban center. One major effect of this is the cost of infrastructure required, as either new infrastructure has to be put in place or upgrading and extending the existing infrastructure. It is on this note that this study seek to examine the effect of population growth on the development of residential property in Wuse Abuja.

1.3       Aim and objectives of the study

            Aim:

The aim of this project is to examine the effect of population growth on the development of residential property in Wuse Abuja.

Objectives:

The specific objectives of this study include:

1. To determine the cause of population growth in Wuse Abuja and Nigeria at large.
2. To evaluate the state of residential properties in Wuse Abuja
3. To determine the effect of population growth on the development of residential property in the study area
4. To identify other factors affecting residential property development Wuse Abuja
5. Assess the impact of population growth on the demand for residential properties in the study area

1.4       Research Questions

1. What are the causes of population growth in Wuse Abuja and Nigeria at large?
2. What is the state of residential properties development in Wuse Abuja?
3. What are the effects of population growth on the development of residential property in the study area?
4. What are the other factors affecting residential property development in Wuse Abuja
5. What is the impact of population growth on the demand for residential properties in the study area?

1.5       Significance of the study

The importance of the research is to be appreciated by all since concepts of population growth and its effect of residential properties development affects everybody irrespective of class, status or occupation.

However, the study will be importance to the following categories of persons.

1. Government (policy makers): The government will benefit from the study since it will provide the basics for making policy changes and formulating future policies. It helps the economy in planning for development especially in real estate development.
2. Students: The study is important to students since it will reveal more details and provide more information for those who are interested in finding out population trends in Nigeria and its consequences to development of residential properties in Nigeria and also for further studies.
3. Research: This study will provide more information for further research about the population growth and residential property development in Nigeria.
4. Investors in Real Estate: Real estate investors will benefit from the findings of this study as it enlighten on the effects of population growth on development of residential properties, it will put them in better position to make inform decision on how to invest their money.

1.6       Scope and limitations of the study

The scope of this study covers only the effect of population growth on the development of residential property in Wuse Abuja. Other properties such as commercial properties, industrial or educational properties will not be included in this research. Geographically, the study is limited to Wuse in Abuja the Federal Capital Territory.

Limitations

The researcher faced various problems when carrying out this field study. Some of these challenges included:

1. Some respondents were unwilling to fill the questionnaires since they were suspicious about the study. Many perceived it as sharing very vital information which they were not ready to furnish the researcher with.
2. Delays were experienced from the respondents who took very long to complete the questionnaires and constant postponement of the picking date proved to be very frustrating to the researcher.
3. At times some of the respondents did not fill in the questionnaires adequately and ignored certain sections that required the giving of opinions which made it difficult for the researcher to make adequate conclusions.

1.       Operational definition of terms

Population Growth: Population growth is the increase in the number of people that reside within a state or country.

Property development: Property development, is a business process, encompassing activities that range from the renovation and re-lease of existing buildings to the purchase of raw land and the sale of developed land or parcels to others (Wikipedia, 2017).

Property: This is the embodiment of tangible ownership right or bundles of right in real estate. It could also be described as a concept of right which can be held separately (Babatunde, 2003).

Rental Value: This is the worth or value of property in an open market. It is also the value arising out of the lease or renting out of a property on a periodic basis usually yearly.

Residential Property: it is a building that is used or suitable for dwelling purpose. They are dwelling house such as bungalows, duplex, detached houses, semi-detached houses, etc. (LBTT 4010)

1.8       The study area

Wuse is one of the district in Federal Capital Territory Abuja. Wuse District is the north western part of the city, with the Maitama District to its north and the Central District to its south. The District is numbered Zones 1-8.  Wuse Market is Abuja’s most popular market (Zone 5). The second most important Post Office in the city is located here.

This district also houses the Sheraton Hotel and Towers (Zone 4), Ibro International hotel, Rockview Hotel, the Nigerian Customs Services Headquarters, the Foreign Affairs Ministry Headquarters (Zone 1) and Federal Road Safety Commission (FRSC). National Agency for Food and Drugs Administration (NAFDAC) (Zone 7), Wuse General Hospital, and the Nigerian Tourism Development Corporation.