Articles
| Open Access |
DOI: Risk Assessment of Real Estate Investment in Ibadan, Oyo State, Nigeria
Abstract
Real estate investment remains a critical component of urban economic development; however, it is inherently exposed to multiple forms of risk that vary across spatial and institutional contexts. In emerging cities such as Ibadan, Nigeria, macroeconomic instability, weak regulatory frameworks, and infrastructural deficiencies continue to shape the risk profile of property investments. This study assessed the nature, severity, and determinants of risks associated with real estate investment in Ibadan, Oyo State, with specific focus on developing areas within Oluyole Estate. The study population comprised registered Estate Surveyors and Valuers and registered real estate developers operating within the study area. The sampling frame consisted of 217 professionals; from whom a sample size of 160 respondents was determined using Taro Yamanes formula and selected through simple random sampling. Descriptive statistics, the Relative Importance Index (RII), and multiple regression analysis were used to analyze the data, which were obtained by distributing structured questionnaires proportionately among the two professional groups. The findings show that the biggest danger to the profitability of real estate investments is economic risk, specifically inflation, interest rate volatility, and growing construction costs, which score highest with a RII value of 0.92. The second most important risk variables were found to be legal and regulatory concerns, such as unstable land titles and delays in planning permissions; construction and market-related risks also had a substantial impact on investment performance. Further evidence that economic and legal concerns have statistically significant positive effects on perceived investment risk is provided by regression results, which together account for almost 69% of the variation in investment risk within the research area. The results show that Ibadan's real estate investment risk is multifaceted, systemic, and heavily influenced by institutional and macroeconomic factors. In order to encourage sustainable real estate investment in Ibadan, the study recommends thorough professional risk assessment, increased regulatory transparency, and improved land administration efficiency. It concludes that investors' exposure to investment failure is increased by inadequate risk assessment and mitigation practices.
Keywords
Real estate investment, Risk assessment, Investment risk, Ibadan, Nigeria
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Copyright (c) 2026 Ogundiran, Amos Adeyinka, Arowolo Babatunde Emmanuel, Omoni Adedayo Adebola
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