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Abstract
In this paper, we explore the concept of property market maturity as it relates to the residential property market in Nigeria. It builds on the market maturity framework, which was primarily developed to compare office property markets in European countries. We adapt the market maturity criteria to incorporate a checklist of characteristics applicable to a developing country. It recognizes the priority of place occupied by information in the determination of property market maturity in European office markets but argues that this stems from a sophisticated land registration system. The level of compliance with planning is an important criterion affecting the state of market maturity missing from the original elaboration.
Unlike the stock market, the property market is generally perceived as an imperfect market with a set of constraining influences on information and demand and supply flows. However, in practice there are no unique characteristics that relate to and define all property markets. Property market constraints vary across countries with institutional differences, for example, in lease law, planning, and land registration procedures. This has important ramifications, particularly for international property investment, and it is in this context that researchers began to compare property markets through the concept of market maturity. Maturity in these studies is measured in relative terms, and initially compared countries across Europe and then Asia. Seen from a global perspective, such a comparison is of only a relatively narrow spectrum of property markets. Prima facie it is probable that the concept will need to be refashioned to incorporate the more informal frameworks of property markets in developing countries. We reconsider and extend this concept to a broader range of property markets by encompassing developing countries and looking at the related notion of transparency. We tackle this task by specific reference to the operation of the residential property market in Nigeria.
The paper is divided into four sections. In Section Two, we dissect the definition of market maturity by a review of the literature. In the next section, we examine the issues involved in developing the concept, drawing on the constituents of a transparency index designed to assess property markets across the world and the particular characteristics of developing countries. In Section 4, we begin by expanding the previous criteria to capture...