CLASSIFICATION OF PROPERTY MARKET

INTRODUCTION
Various property market sectors exist in Nigeria; the major sectors are residential and commercial sectors. The locations of office are usually at the central business districts. The case of Broad Street and Marina in Lagos and most other high streets in most Nigerian towns are well known. The residential sector is the fastest growing sector in Nigeria. The demand for middle and low income housing always outstrip supply. This is as a result of the lack of provision of enabling environment by the government. As a result, it assures the investor the highest security of income flow and capital. Classification of real property market operation, are carried out based on the type of property transaction in real estate, and the kind of real estate markets recognized, as specialized field of operation.

OBJECTIVES

The unit objective is to highlight the classification in the property market.

 Classification of the property market

Classification of property could be in line with the use:
1. Surface land:

• agricultural land, 
•  forest land, 
•  transportation and communication, 
•  recreational, 
• building sites ( i. industrial, commercial, residential, government and institutional. ii. Rural non-farm) 

2. Water resources
3. Surface mineral rights
4. Super-surface air rights

Another classification is according to purpose:

i. Investment properties
ii Marketable non-investment properties and
iii. Service properties (non-investment and non-marketable)


Each group of properties, which can in some measure be substituted for one another, represents a separate market. The lines of demarcation are numerous, size, style and value each represent barriers but the principal divisions are formed by location, whether the estate is available for renting or sale, investment or occupation and according to use. The property market is sub-divided into various sectors based on the following factors:

1. Location: Not all properties in the property market are localized, therefore, the valuer tends to concentrate on a particular area and become an expert in its pattern of values and general characteristics. The uniqueness of location is only relevant to the extent that there may be other property offering comparable advantage of position. From the estate surveyors point of view it is usually preferable to hold an estate that forms part of a wide market as its value is more readily determined and, if necessary, its disposal is more easily arranged. 
2. Rent or Sale: the markets for property for rent or sale are usually separate, although they may overlap and they do in fact merge where leases are granted at a premium. As a rule however, the markets for the sale and leasing of property are quite distinct. According to prevailing conditions, there is a tendency for properties of each type and class either to be available for purchase or renting but without the choice of both on comparable terms. The estate surveyor concerned with the disposal or acquisition of an estate may often have to consider whether it is in his interest to let or to sell. His decision will be influenced by the comparative attraction of the renting and sales market, and the terms upon which credit may be obtained. 
3. Investment or Occupation: The investment and occupation of property often overlap. The position is usually determined by whether the property being disposed of is occupied or vacant. Nevertheless, an occupied property may be purchased with the aim of obtaining possession and going into occupation. A vacant property may be bought in order to lease it to a tenant. The prices paid for properties sold for occupation may merely reflect the personal needs of an individual purchaser. Hence, the valuation of property is commonly approached by investment method that is, each estate is regarded as being available for investment as far as its value is concerned. 
4. Type of use: This is the most important basis of division in the property market. Its significance is enhanced by land use control which governs changes in use and so makes it essential in most cases that the actual permitted use of each estate is determined before it is offered in the market. There many types of divisions or use within property market but the major categories are residential, industrial, agricultural, recreational and commercial (shop, offices) properties. 

SELF ASSESSMENT EXERCISE 1

• What factors influence the classification of property market? 

CONCLUSION

This unit having considered classification of property, affords you a better understanding of

your field of study.

SUMMARY

This unit pointed out the relevance of property market information sources, and the classification of the market.