Property value and its agents

Property is a multidimensional product. Property value is dependent upon many characteristics associated with that property such as physical characteristics of property; location of the site in relation to employment centers and other recreational facilities (accessibility). In addition, the social and economic characteristics of neighborhood, including the presence of such amenities as parks, schools and community services affect value. Those attributes are usually provided by the State and Local governments through their various policies and services.

The value of a property is greatly influenced by location. Location impacts on the value of residential property may arise from any number of sources, such as accessibility to shopping centre, educational and leisure facilities. Prices of houses are not only determined by accessibility but also by the environmental attributes of the location. The environmental factors, such as neighbourhood amenities and the level of security in place in such neighbourhood have to be taken into account.

To consolidate urban structure and the cost of providing urban infrastructure, existing infrastructure is more effectively utilised in the built-up urban areas. The infrastructure includes services such as sewage and drains, roads and public transport, as well as social infrastructure such as health care facilities, education facilities and other community services. These attributes are usually provided by the State government and by the municipal council through its’ policies and services.

The effects and influence of those factors exert a complex interaction that will affect the value of properties. This leads to households that will respond to differential public service levels by migrating between localities to meet their needs.

In Lagos, sale prices of properties vary for different locations due to the attributes. For people who live on the Island, location decisions may be influenced by the balancing of desires and the environments. Location is therefore a key influence in explaining house price dynamics.

Affordability of houses is not only determined by the demand for the attributes of the dwelling units themselves, but also the area in which the properties are located. More distant locations from the city centre may have more attractive features and amenities, despite their longer commute. Usually, all neighborhood properties have the same or highly similar locational relationships with common origins and destination.

Also, Public transportation is crucial for the numerous people who do not own cars or prefer not to use them during the day or week as the case is with the Lagos metropolis where traffic goes awry.

Distance from public transportation is considered in relation to the people who are to be served by it. Urban apartment  residents usually prefer to be within convenient walking distance of public transportation.

On the other hand, income levels, profitability of business, inflation and interest rates are also important factors in determining general level of property value at any given point in time. Households which have the same tastes and income, tend to live within the same area. Therefore, factors such as the size of households, their ages, income and education levels and the availability and cost of mortgage finance have to be incorporated in affecting the types of housing and the values.

High-income residents will seek out a part of city that may offer leisure facilities,
parks, social amenities and the most convenient form of transportation and infrastructure. This also reveals that the proximate and relevant influences on the property are related to the same influences operating on other properties in the neighbourhood.

In summary, residents are attracted to a location because of status, physical environment, availability of services, affordability and convenience. However, residential groups generally socialize with those of a similar educational, cultural or social level. The important social characteristics include;
• Quality of educational, social, recreational, cultural and commercial services.
• Community or neighbourhood organisations (e.g. neighbourhood watching area).
• Occupant age levels, particularly important in residential neighbourhoods.

Invariably, it is difficult to attempt to relate the preferences to an effect on property
values. An appraiser should not place too much reliance on social influences when
arriving at a value conclusion. Another consideration is to environmental attributes that consist of any natural or man-made features that are contained in or affect the neighborhood and the neighborhood’s graphic location. The important environmental considerations include open space, nuisances, hazards emanating from nearby facilities such as shopping centers, factories and schools; adequacy of public utilities such as street lights, sewers and electricity, general maintenance; street pattern, width, and maintenance.

Whilst an excessive volume of vehicular traffic, air pollutants such foul odor, dust and noise from commercial or manufacturing enterprises restrict a residential neighbourhood’s desirability.