The Effect Of Inflation On Residential Real Estate Investment Returns In Oyo State, Nigeria

Inflation remains one of the most significant macroeconomic variables influencing the performance of residential real estate investments in developing economies such as Nigeria. Persistent increases in the general price level affect construction costs, property values, rental income, financing costs, and investors' purchasing power, thereby influencing the overall returns generated from residential real estate investments. This study examined the effect of inflation on residential real estate investment returns in Oyo State, Nigeria. To achieve this goal, the following objectives were stated; to examine the trend of inflation and residential real estate investment returns in Oyo State, Nigeria, over the period of the study and to determine the effect of inflation on rental income generated from residential real estate investments in Oyo State.  The study adopted a quantitative research design using both primary and secondary data. Descriptive statistics, Pearson correlation analysis, and multiple linear regression were employed to analyze the data at a 5% level of significance. The findings revealed that inflation exerts a statistically significant influence on residential real estate investment returns in Oyo State. The regression results indicate that inflation significantly explains variations in residential investment returns, although its impact is moderated by property location, occupancy rate, market demand, and prevailing economic conditions. The study concludes that inflation remains a critical determinant of residential real estate investment performance in Oyo State and should be carefully considered in investment appraisal and portfolio management decisions. It recommends that investors adopt inflation-adjusted valuation techniques, diversify property portfolios across strategic locations, and incorporate macroeconomic indicators into investment decision-making processes.