Empirical analysis of residential submarket conceptualisation in Ghana

Abstract

Purpose The purpose of this paper is to empirically test for submarket existence based on an understanding of the residential rental housing market in Ghana. Design/methodology/approach Based on extant literature and market observations, the authors provide key concepts and an overview of the residential rental market dynamics in Ghana. Reseachers appreciate that submarkets may exist in the Ghanaian rental market but have ignored the empirical testing for submarket existence due to data asymmetries. Based on real estate experts and stakeholder consultations, a priori delineation of submarkets are constructed based on spatial, structural and a nested approach. Submarket existence is tested using the Kruskal–Wallis H test and Hedonic modelling techniques. Findings By using fieldwork data from Accra rental market, the analysis provides credence to the conceptualisation of submarkets and how to empirically test for same. It is argued that researchers should use alternative methods to compare results to make far-reaching conclusions. Research limitations/implications Examining the hypothesis that differential rental values exists for submarkets has implications for policy decisions to target submarket constructs differently to improve market maturity. Practical implications The research provides stakeholder investors in the rental space an understanding of market dynamics for profit maximisation, and end-users to maximise utility in deciding where to live – and as such households could benefit from making informed investment decisions on housing. Originality/value This research is one of the first attempts to empirically identify and test for submarkets existence in Ghana’s residential rental housing market.