CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Real estate trend is a generic term used to describe any consistent pattern or change in the general direction of the real estate industry, which must be based on fact and, over the course of time, causing a statistically noticeable pattern of change (Mueller, 1999). This phenomenon can be a result of the economy, a change in mortgage rates, consumer speculations or other fundamental and nonfundamental reasons. A trend can be downward or upward, horizontal or vertical depending on the series of related changes that are identified and projected into a plausible future. When such trends are based on rental values then the observation will be confined to any evident changes in rent patterns. Rents passing on properties are bound to be influenced variedly due to the heterogeneity of real estate. These factors range from intrinsic to extrinsic characteristics. They include closeness to high-rise office buildings (Thibodeau, 1990); accessibility (Ball, Lizieri and MacGregor, 1998); location, size, structural characteristics (Tay, Lau and Leung, 1999; McCluskey, Deddis, Lamont, & Borst, 2000); proximity to rail and park (Jensen and Durham, 2003); provision of balconies (Chau, Wong, , and Yiu, 2004); proximity to open space (Anderson and West, 2005); location of dams (Provencher, Sarakinos, and Meyer,. 2006); the situation of a new sport venue (Dehring, Depken, and Ward. 2007); distance from foreclosed properties (Lee, 2008); local historic designation (Ijla, 2008); the impact of inflation and real construction cost in the long-run while in the short-run increase in wealth rising from equity price (Leung, Chow and Han, 2008); provision of wall-fence round the building and the installation of burglary proof in all the windows (Olujimi and Bello, 2009); nearness to worship centres‟ (Iroham, Oloyede and Oluwunmi, 2011) amongst others. Specifically for commercial properties certain factors do abound as revealed in previous studies. Such factors include average floor area and number of rooms (Slade, 2000); changes in floor space and prime lending rates (Chin, 2003); size of sales facility (Kivilahti and Viitanen, 2006); neighborhood and physical characteristics (Marco, 2007). From these backdrops these requisite factors have to be continually evident for properties to keep commanding attractive rents that will generate an impressive trend/pattern from the stance of investors over a given period of time. Rising rents have been described as an attraction for rental real estate development as prospect of rental growth is also an important viability consideration.