An Examination Of The Effects Of Current Economic Recession On Real Estate Development In Enugu Urban, 2005 - 2014

ABSTRACT

Recently, Nigeria witnessed unstable exchange rate, currency devaluation, high cost

of fund e.t.c, which were attributable to the current global economic recession. As a

result of the recession, real estate development in Enugu Urban was equally affected

and it became impossible to access development funds due to scarcity and high cost

of fund. Meanwhile, most existing studies on the subject tend to concentrate on the

demand side of the effects of the economic recession on real estate development (rent,

affordability, e.t.c ) to the neglect of the supply side (cost of fund, mortgage financing

and actual development of real estate development in particular). The aim of this

study was to address this supply side by critically examining the effect of the current

economic recession on real estate development with a view to proffering alternative

solution for cost – effective finance and development of real estate in Enugu Urban.

The specific objectives were to examine the impact of the economic recession on the

quantity and quality of real property development and also to verify the effect of

economic recession on the cost of fund. The data collected were through primary and

secondary data collection. The primary data collection was through the use of

interview and questionnaire. In the course of the survey a mixed mode of data

collection procedure was employed. Two separate questionnaires was, one for

financiers and the other for real estate developers. Oral interviews were organized by

the research with some Estate surveyors and manager of some commercial banks in

Enugu Urban. Data collected from the period 2005 to 2014 were analyzed with

descriptive and parametric statistics based on normality. The hypothesis tested

showed that there was no significant difference in the opinion of Estate Surveyors and

Valuers that the recent economic recession has effect on real estate development in

Enugu. The study concluded that: from the fore going, it has been discovered that real

estate development in Nigeria, especially in Enugu Urban is immensely affected by

the current economic recession ravaging the globe. It is therefore very imperative for

all the stakeholders in real estate development sector of the economy to adopt such

measures that could bring about a change in the current economic trend to avert

further negative impact occasioned by economic recession. The study recommended

that: the Nigerian government should weather the storm of the current economic

recession in the country by diversifying the economic resource base currently

dominated by crude oil. One of the ways of achieving diversification of economic

resource base of the country is by encouraging commercial agriculture and tapping

other mineral resources available in the country such as Gold, Tin, Coal, etc. Also,

the Central Bank of Nigeria is urged to evolve policies that would ensure steady flow

of financial resources to the mortgage finance sector