Factors Influencing Off-Plan Real Estate Investment in the Lekki-Ajah Axis of Lagos State
DOI:
https://doi.org/10.5281/Keywords:
Development, Investment, Off-Plan, Real EstateAbstract
This paper aims to investigate those factors influencing off-plan real estate investment strategy with a view to proffering solutions to the hindrances of the strategy. Structured questionnaires were used to obtain expert opinions on the questions raised in the study. Opinionated data were analysed using frequency, mean, standard deviation, and relative importance index. Analysis was achieved with the aid of Statistical Package for Social Sciences (SPSS), version 20.0. The analysis’ outcome revealed that several factors are driving and hindering off-plan real estate sales. The study revealed that options to spread payments (0.88), purchasing at a lower price than finished properties (0.87), the benefit of selling at a higher price upon delivery (0.80), and the chance to select units before or during construction (0.79) were significant drivers of off-plan real estate investment. In contrast, the hindering factors were delays in delivery (0.86), potential loss of invested funds due to unscrupulous developer actions (0.83), loss of capital growth if a refund occurs (0.81), investment loss in the case of construction collapse (0.80), and abandonment of the project by the developer (0.79). The study recommends the following: developers should divide their projects into proportions and only sell off-plan after completing the preceding proportion, use of independent project manager who represents, monitors, and reports to investors directly, a law regulating off-plan sales and investment, the provision of a ‘loss of deposit’ insurance cover to off-plan investors to ensure that their deposits are fully refunded in the case of the developer insolvency or negligence.
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