Residential Real Estate Properties in Nigeria: How Fair are the Market Prices?
The study investigated the price fixing mechanism for residential housing units in Nigeria, using Benin and Lagos housing markets as examples. The objective was to determine the fairness of the price fixing mechanism in the Nigerian real estate market. To achieve this objective, a total sample of 3,034 real estate market transactions comprising of 856 and 2,178 market data from Benin and Lagos real estate markets respectively, was used to train, cross-validate and test an artificial neural network (ANN) built for this purpose.The study compared and statistically tested networks’ generated fair market values against actual sales prices obtained from two cities in Nigeria. The results showed no significant differences between the actual sales prices of the properties in the data sets and the network market values generated by the ANN model. The paper concluded that the pricing fixing mechanism in Benin and Lagos (and in general, Nigeria) residential real estate markets is relatively fair and that market transaction prices of housing units in Nigeria are fair representations of the properties true market values.
Keywords: Artificial neural network, residential real estate, real estate market, fair market values