A Comparative Analysis of Return on Residential and Commercial Real Estate Investment in Enugu Urban Area from (2015 – 2024)

This research work conducts a comparative analysis of returns on residential and commercial real estate investment in Enugu urban Area. Three objectives were used in this work and they are; to determine the returns on residential and commercial real estate in Enugu Urban Area from 2015-2024 respectively, to compare the returns on investment from both types of real estate in Enugu Urban Area. The research design and methodology used on this work is the survey research method which deals with studying small, large population or universe by selecting and studying samples. The landlords, Estate surveyors and valuers, Real Estate developers formed the population of study. A sample size of 1462 was chosen using the stratified random sampling techniques, questionnaire distributed randomly to collect data after which 1278 were returned representing 87%. The sample were presented and analyzed using statistical tables, bar charts representation. Analysis of variance (ANOVA) was used to test the hypothesis and it was seen that there is a significant difference between the returns on investment in residential and commercial real estate in Enugu Urban Area. Using the ROI formula it was observed that there has been a steady increase in returns of residential and commercial properties in Enugu from 2015 to 2024. However, the rate of increase in commercial properties was higher than that of residential properties within 2015-2024. The residential and commercial real estate performed well with positive mean rental return through the period but commercial real estate returns better with a mean rental return of #2,621,296 from residential real estate which has a mean return of #2,155,557. Recommendations made from the findings of this work is that there should be orientations and sensitization programs involving the entire building team with a view of having an organized environment for investment to flow commensurately, review of building policies like, building codes, zoning ordinances etc to suit current challenges faced in the building industry, there should be policies that will support uniformity of designs, use of finishes & fittings in a particular area to enable easy definition of property which will in turn yield appropriate return. Transparency in the services of development control agencies, reduction of high cost of import duty to reduce high cost of building materials and encourage regular maintenance of existing properties which will encourage growth in return. Finally; government should assist through their monetary and fiscal policies to enhance the building industries, since the development of residential real estate drives the development of commercial real Estate.

Keywords: Comparative real estate investment, residential property returns, commercial property returns, return on investment (ROI), Enugu Urban Area.