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As Property Developers Lament Low Sales
Recent reports have emerged that the property market, which ordinarily used to be insulated from an economic recession, especially in Nigeria, is now hard-hit by the current economic downturn in the country.The real estate sector has always witnessed increase in demand for property/land across major cities in the country, but the reverse is the case now, as the on-going economic recession has eaten deep into the fabrics of the sector, crashing the demand for property in highbrow areas across major cities in Nigeria by more than 50 percent, according to experts.
For example, our investigation have shown that the demand for property in estates such as Banana Island, Old Ikoyi, Parkview Estate, Lekki Phase 1, Oniru, Magodo, Dolphin and Osbourne Foreshore, in Lagos; have dropped drastically due to either job losses or several months of salary arrears owed prospective and current occupants.According to estate developers and managers, hundreds of their clients have packed out of their apartments, and have moved to neighbouring towns and states where the standard of living is cheaper.A good number of buildings in the estates, according to findings were vacant, as their former occupants have abandoned them, either for cheaper ones or their own property.
The assertion by estate managers and developers that demand for property had dropped drastically was confirmed by several tenants, most especially bankers and oil and gas workers, who have either been sacked or are owed backlog of salary arrears due to the economic recession. A former staff of First Bank Plc., who pleaded anonymity says that he had to vacate his former rented apartment in Osborne Foreshore, Ikoyi, Lagos, because he could no longer afford the N10 million annual rent for the duplex he occupied with his family. “I never expected the bank to dismiss me because I thought I was doing well on the job. I have moved my family from a duplex to a two-bedroom apartment around Ojodu Berger close to Ogun State, and changed the schools of my three children too, because houses and schools are cheaper in the developing areas compared to highbrow areas in the state.
“If I had not relocated, I would have gone bankrupt, because my severance pay was not paid by the bank and I am still owed August salary with other allowances. The recession is really biting hard and life is becoming miserable. “A lot of people have misconceptions that bankers only live for today and not tomorrow; that we all live on credit/loans taken from the bank, but many failed to understand that most of us are not duly paid because the banks too are broke.”
Some property managers and developers who were spoken to disclosed that the economic recession bedeviling the nation had reduced the demand for property across major cities in the country by over 50 per cent.They blamed the Federal Government for its inability to take certain proactive measures to position the sector to pull the economy out of recession.Managing Director of Sunday Ojo Estate Agency, Elder Sunday Ojo, explained that the demand for property and land had dropped tremendously as a result of the economic downturn, coupled with the foreign exchange crisis that led to the hike in prices of building materials in the country.”The Federal Government should look for locations that are affordable for the low income earners and build houses there, because it widely known that the location of a property determines its value. Also, it should activate mortgage finance policies that will cater for everybody that has gainful source of income and not for just the public servants alone,” he said.
A chartered Estate Surveyor and Valuer, Mr. Segun Babalola of Segun Babalola and Associate, who manages properties in Lagos Mainland and Victoria Island areas of Lagos State, disclosed that the fortunes of the sector had been dwindling before the country officially went into recession.He stated that the prices of a three bedroom duplex had dropped in Lekki since February 2016. For instance, such duplex that was valued for rent at N4.5 million per annum had dropped to N3.5 million in February, in order to get people to subscribe to the apartment.”The apartments are just there, and it is understandable that many people cannot afford these apartments, but in situations like this, the government and some operators should put the right policies in place that will enhance growth in the sector. The government should emulate the former governor of Lagos State, Alhaji Lateef Jakande, and develop affordable property needed by the masses,” he said.
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