Investigating the Influence of Economic Indicators on Property Value Trends in Keffi

Abstract

Economic indicators such as Gross Domestic Product (GDP), inflation, interest rates, employment levels, exchange rates, and consumer purchasing power are widely recognized as key variables influencing property markets. Hence, this study examined the impact of economic indicators, including GDP, inflation rates, interest rates and unemployment rates on property value trends in Keffi, Nigeria with the aim of providing valuable insights that can guide future research, policy development, and investment strategies in the Nigerian real estate market. Using primary and secondary data sources, the research employed trend analysis, statistical models (R², RMSE, MAPE), and ANOVA to investigate the relationship between economic indicators and property values. The results showed a steady increase in residential property values over the years, with fluctuations in macroeconomic variables such as inflation, interest rates, unemployment, and GDP. The study's models demonstrated good predictive accuracy, indicating that economic indicators have a significant influence on property value trends in Keffi, Nigeria. The ANOVA results revealed that inflation rates have a negative, albeit insignificant, correlation with property values. In contrast, high interest rates were found to suppress property values by increasing borrowing costs, deterring potential buyers. Conversely, positive GDP growth was associated with increased property values, reflecting heightened economic prosperity and investment capacity. Additionally, high unemployment rates negatively impacted property values by reducing overall demand in the property market. The study concludes that macroeconomic variables, including interest rates, inflation, GDP growth, exchange rates, and employment levels, significantly influence property market dynamics. Hence, the study recommended that to stimulate the real estate market, policymakers should implement policies promoting economic growth, stability, and development, such as investing in infrastructure, promoting foreign investment, and fostering economic development.