Background of the Study
Economic recessions are periods characterized by a significant decline in economic activity across the economy, leading to reduced consumer spending, increased unemployment, and lowered investment. The real estate market, being sensitive to economic shifts, often experiences downturns during such periods. In Nigeria, the real estate sector has been significantly affected by macroeconomic fluctuations, particularly during recessions (Olayemi & Olanrewaju, 2023). Sokoto State, located in the northwestern region of Nigeria, has experienced its own set of economic challenges, including the impact of national recessions on local markets.
The real estate market in Sokoto is largely influenced by factors such as government policy, infrastructure development, and regional socio-economic conditions. However, like many other regions, it has not been immune to the broader economic trends, such as inflation, reduced access to financing, and a decline in consumer confidence during economic recessions (Amidu & Bello, 2023). This relationship is particularly important to explore, as Sokoto State is home to a growing population, which increases the demand for housing, but also faces challenges related to income levels and job security during economic downturns.
The impact of economic recessions on the real estate market in Sokoto State can be observed in the fluctuation of property values, rental yields, and construction activities. Several studies have shown that during recessions, property values tend to decrease, while demand for rental properties may either stagnate or decline due to lower purchasing power (Nwankwo & Adedeji, 2024). However, in some cases, recessions can provide opportunities for investors to acquire property at lower prices, positioning them for long-term gains when the economy recovers.
Given the significant role of the real estate sector in the economic development of Sokoto State, understanding how recessions affect the market’s performance is crucial for investors, policymakers, and other stakeholders. This study aims to investigate the extent to which economic recessions influence real estate market performance in Sokoto, examining the interplay between macroeconomic factors and local real estate dynamics.
Statement of the Problem
The relationship between economic recessions and real estate market performance in Sokoto State has not been extensively studied, leading to a gap in understanding how macroeconomic downturns affect the local real estate sector. While national-level studies have explored this dynamic, regional studies focusing specifically on Sokoto State remain scarce (Kola & Yusuf, 2023). Given the state’s economic challenges and the increasing reliance on real estate as a key investment avenue, it is essential to understand how economic recessions influence property values, market demand, and investment activity in the region.
The absence of detailed, localized research leaves investors and policymakers without critical insights into how they can mitigate risks and capitalize on opportunities during periods of economic downturn. Additionally, the lack of understanding about the regional impacts of recessions may result in inadequate policy responses that fail to stabilize the local real estate market. This study seeks to bridge this knowledge gap by providing a comprehensive analysis of the impact of economic recessions on real estate market performance in Sokoto State.
Objectives of the Study
Research Questions
Research Hypotheses
Scope and Limitations of the Study
This study will focus on analyzing the impact of economic recessions on the real estate market in Sokoto State. The scope will cover residential, commercial, and industrial properties. The limitations of the study include potential data access issues, particularly with regard to detailed real estate transaction data, which may be limited or unavailable in public records. Additionally, the complexity of measuring the exact impact of a recession on real estate due to external factors, such as political stability and changes in policy, presents challenges in drawing definitive conclusions.
Definitions of Terms
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