Determinants Of Residential Rental Values In Ghana: Evidence From Experts And Stakeholder Perspectives

Rental value or rent that is observed in the market has individual utility bearing attributes (explanatory variables) that could be modelled to ascertain the significance or contribution of same on overall rental value. We analyse the main drivers of residential rental values (RRVs) from experts and stakeholders in the residential rental market in a developing country context. A residential property is multidimensional and spatially fixed. A variety of theoretical and econometric studies have explored the determinants of house prices. However, the phenomenon that location determines RRVs has not been much understood as various researchers measure these explanatory variables differently. Not only does location and neighbourhood attributes determine to a large extent RRVs, but also the physical characteristics of the subject property. We present a first step in recognising and identifying which explanatory variables are relevant in determining RRVs prior to an empirical analysis. This in our opinion puts the discussion in its proper perspective in a market that is highly complex and diverse. To situate the research in its proper local context, 114 respondents (who comprise experts and stakeholders in the rental market) were asked their views about what they perceive, based on their individual experiences, on what explanatory variables drive the fixing of RRVs in the rental housing market in Ghana. We provide 38 different variables based on 3 broad groupings; structural, locational and neighbourhood characteristics. Most of these variables are statistically significant and have a positive effect on RRVs. Respondents agree that the variables electricity connection, piped water connection, type of house, property condition and number of bedrooms ranked among the top 5 variables per the relative importance index measured. Also the variables storeroom availability, rental units near to recreational facilities and a place of worship, quality of landscaping and number of storeys ranked among the bottom 5 variables.