At the centre of 17 million housing deficit, a huge number of vacant houses, coupled with high rental values persists in Lagos and Abuja. DAYO AYEYEMI reports
Nigeria’s real estate sector is still going through tough time as vacant houses persist in major cities despite the recorded growth in the economy and nation’s foreign reserves
Two major cities that have taken direct hit of this followed by high rents are Lagos, a commercial nerve centre and Abuja, the nation’s capital.
The number of vacant houses, especially at the higher end of the market in these two cities, has risen sharply in the last one and half years, in which Nigeria experienced economic crisis.
According to latest New Telegraph investigation, most streets in Lagos and Abuja’s high brows are still filled with huge number of vacant houses despite the seeming improvement in the economy, just a few days to end the year.
Some of the high brow locations include Ikoyi, Victoria Island, Lekki, Ikeja GRA in Lagos and Asokoro, Maitama, Wuse II and Jabi districts in Abuja. These locations have a high number of unoccupied houses despite the nation’s housing deficit of over 17 million units.
Market survey further revealed that despite huge number of vacant houses in the metropolis, high rental values persist as tenants and accommodation seekers find it difficult to cope due to their low-purchasing power occasioned by uncertainties in the general economy.
Survey by New Telegraph showed that rental values for three bedroom terrace building in Ikoyi ranged between N7million and N10million per annum depending on location.
Rents for three bedroom apartment in Ogba, Okota, Isheri, Ketu and Surulere cost N700,000; N600,000; N450,000; N450,000 and N1.5million per annum respectively. The same accommodation costs between N3.5 million and N8million in Victoria Island and Lekki, Lagos. Two bedroom flat in Ogba, Isheri, Ketu and Lekki costs N450,000; N300,000; N300,000 and N2.2 million.
In Abuja, house rent in Maitama costs between N7million and 25million. Rental values for three bedroom in Wuse II, Jabi and Mabuchi cost N7million, N4.8million and N2. 5 million per annum, while rents for two bedroom flats in the same locations cost N6million, N6million and N2million respectively. Rent for two bedroom flat in Apo costs N1.5million.
It was gathered that the rental values in Abuja depreciate as one moves into the outskirts such as Nyanyan, Mararaba and Suleja, justifying reason for overcrowding in these settlements.
For real estate practitioners and estate agents, the business environment has remained unfriendly as tenants have refused to pay new rent while accommodation seekers are waiting for buoyant economy.
Some of the practitioners that spoke with New Telegraph stated that the number of empty property in Lagos and Abuja high brow areas was on the increase as a result of the state of the economy.
Principal Partner, Kola Akomolede and Company, Chief Kola Akomolede, said the vacant houses refused to find buyers due to slump in the economy.
“Business is still dull. The empty houses have refused to go because recession is not yet over. There is no enough money in circulation and there is low purchasing power,” he said.
Managing Director, Jetobless Properties Limited, Mr Toluwa Jekede, a property agent in Lagos, blamed huge empty houses on absence of institutional and corporate investors/ buyers, who he said left the country due to uncertainties in the nation economy
He said the vacant houses most especially in Ikoyi, Ikeja GRA, Lekki have refused to go despite reduction in rent to attract tenants.
According to him, most of the properties in his care for more than two years have been vacant without anyone asking for them for occupation.
“I have some vacant houses in Ogba, Adeniyi Jones, Opebi and Ikeja GRA. They are just emptied for two years now. Accommodation seekers do not even have the money to rent some of these houses unlike before when it was based on who came first,” he said.
However, he expressed hope that as the country’s economy improve and attracts foreign direct investment, some of the institutional investor would return, while blue chip companies would want to buy property for their staff.
An estate agent in Ojodu-Lagos, Mr. Ikenna Mojerie, said that many young accommodation seekers were not ready for big apartment due to their low-income level, noting that demand for mini flats with affordable rents are on the increase.
Slump in real estate
It would be recalled that despite the positive trajectory in the economy, real estate and construction sectors are yet to buck the trend as they still grow at negatives. Construction sector has been in free fall since one and half years ago, around the period the Central Bank of Nigeria published a list of 41 items that were invalid for forex.
Most of these items were real estate/construction sector related and this exacerbated an already slowing sector as most of the materials required for construction in Nigeria are typically imported.
Chief Executive, 3Ivest, Mrs Ruth Obih-Obuah, noted that the recent economic downturn had caused real estate sector in Africa to fall below the projected 2.6 per cent regional growth.
In her calculation, Ruth-Obuah is of the opinion that balancing short-term indicators with long-term structural change would reinstate investor confidence. This, she said, was paramount to success and continued growth recovery process of the sector, as driven by government reforms and policies.
Lecturer at Lagos Business School, Mr. Doyin Salami, urged government to find a pathway to lowering interest rates, adding that it must open space for private sector to drive the process.
Continuous efforts must be made by the Federal Government, through reforms and sound policies, to create opportunities and restore investors’ confidence in the nation’s economy.
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