CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

The state of infrastructure is an important parameter for assessment and indicator of status of any urban system. The efficiency of any form of human activity system, including urban area, largely depends on the provision of efficient infrastructure and services (Babarinde, 1998). It can therefore be concluded that the significance of infrastructure in the proper functioning of an urban area cannot be over-emphasised.

The quality and coverage of infrastructure services have a major impact on living standards and economic growth, yet it is estimated that two billion of the world’s poor people lack access to adequate sanitation, two billion lack access to electricity, one billion lack access to clean water (United Nations, 2002). Food, shelter and clothing constitute the most important needs of man.

Shelter, though second in the hierarchical needs of man, implies having a roof over one’s head to serve as protection from harsh weather and attack. Shelter is often construed to mean housing but housing has a broader horizon. According to Oyenuga (2006) housing comprises immediate accommodation, environment and facilities like roads, water, electricity and a host of other facilities that make living comfortable to the dwellers.

Urban infrastructure, apart from being a major pointer of environmental quality, is a critical agent for the socio-economic development of an urban area (Okusipe, 1999). It plays an important and indispensable role in the economic, social and environmental aspects of life of an urban setting. Urban infrastructure covers a wide range of services and facilities, such as water, road, waste disposal, drainage, communication, primary health services, schools and housing.

Where urban infrastructure is adequately provided and efficiently managed, productive and profitable land uses are usually attracted towards such area. The uses of these infrastructural facilities compete less with productive uses through better rent offers. This competition for locations with good urban infrastructure usually results in an increase in land and housing values, either sales or rentals (Harvey, 1993).

Hitherto, real estate property was generally seen as a legacy a parent bequeaths to the offspring. However, with the realization that real estate is a major source of capital appreciation and a good hedge against inflation, the real estate market is coming close in popularity and importance to the money and capital markets.

In particular, as Nigeria stands on the threshold of establishing a secondary mortgage market to mobilize capital market finance for the primary market, the need to assist real estate professionals with information on the influence of property features/characteristics on residential property values cannot be over stressed. Although several studies have focused on investment in the money and capital markets in Nigeria, so much cannot be said of the real estate sector (Eriki & Udegbunam, 2008).

In the advanced economies however, the use of artificial neural networks (ANNs) in real estate valuation and other fields such as tax assessment, medical diagnosis, bank risk analysis, stock analysis & control, traffic control is now predominant (Moral- Esperanza, 2004).

Indeed, artificial intelligent systems, particularly artificial neural networks have been shown to produce more accurate estimates of property values than the multiple regression analysis and other hedonic methods in many countries of the world – Australia (Kershaw & Rossini, 1999); U. K. (Wilson, et al, 2001); U.S.A. (Lokshina, et al, 2003); Spain (Mora-Esperanza, 2004); Finland (Taffese, 2007); Greece (Pagourtizi, et al. 2007); and Nigeria (Eriki & Udegbunam, (2008). However, in the extant literature, only a few of the works have gone beyond mere demonstration of the use and capability of the ANNs to actual valuation of residential houses; and many of such works employed single city data.

1.2   STATEMENT OF THE PROBLEMS

Public goods such as infrastructure are location-specific and by extension not easily traded across space. Against this backdrop, infrastructure has continued to be spatially but disproportionately distributed. Beyond that, bias and primate city favoritism due to policy distortions have further resulted in highly unbalanced infrastructure distribution and quality between urban centres and even within urban neighbourhoods. Finally, several research has been carried out on the impact of infrastructural facilities on residential property development in Ota, Ogun State Nigeria but not even a single research has been carried out on the assessment of the impact of the infrastructure condition on residential property value in selected neighbourhood of Minna.

1.3   AIMS AND OBJECTIVES

        The main aim of the study is to assess the impact of the infrastructure condition on residential property value in selected neighborhood. Other specific objectives of the study include;

1. to determine the extent to which infrastructure condition affects residential property value in selected neighbourhood of Minna.
2. to determine the factors affecting the condition of infrastructure on residential property value in selected neighbourhood of Minna.
3. to determine the influence of infrastructure conditions on residential property value in selected neighbourhood of Minna.
4. to proffer possible solutions to the problems.

1.4   RESEARCH QUESTIONS

1. What is the extent to which infrastructure condition affects residential property value in selected neighbourhood of Minna?
2. What are the factors affecting the condition of infrastructure on residential property value in selected neighbourhood of Minna?
3. What is the influence of infrastructure conditions on residential property value in selected neighbourhood of Minna?
4. What are the possible solutions to the problems?

1.5   STATEMENT OF RESEARCH HYPOTHESIS

HO:   Infrastructure condition has no significant effect on property value.

HI:    Infrastructure condition has a significant effect on property value.

1.6   SIGNIFICANCE OF THE STUDY

        The study on the assessment of the impact of the infrastructure condition on residential property value will be of immense benefit to the entire neighbourhood of Minna in the sense that it will enable the government to create good quality infrastructure which will serve as a key ingredient for sustainable development. Government should invest in infrastructure for physical and economic development of a city. Finally, the study will contribute to the body of existing literature and knowledge to this field of study and basis for further research.

1.7   SCOPE OF THE STUDY

        The study on the assessment of the impact of the infrastructure condition on residential property value is limited to selected neighbourhood of Minna

1.8   LIMITATION OF THE STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9   DEFINITION OF TERMS

Assessment     The action of assessing someone or something.

Impact    A marked effect or influence.

Infrastructure         The basic physical and organizational structures and facilities (e.g. buildings, roads, power supplies) needed for the operation of a society or enterprise.

Condition        The state of something with regard to its appearance, quality, or working order.

Residential     Designed for people to live in.

Property Value       Refers to the fair market value of a given piece of property, though the actual price of the property may be higher or lower.