Fresh concerns loom large in the real estate sector, as operatives are apprehensive that housing deficit may worsen
Fresh concerns loom large in the real estate sector, as operatives are apprehensive that housing deficit may worsen and investments will drop due to security challenges in the country.
They acknowledged that the rising insecurity and tension arose from dissatisfaction among the population of jobless youth, activities of insurgents, bandits and herdsmen, which resulted into loss of lives and destruction of properties.
According to United NationsHigh Commissioner for Refugees ( UNHCR ), over 3.2 million people are displaced, including about 2.9 million internally displaced persons (IDPs) in north-eastern Nigeria.
UNHCR said $848 million (N259, 488, 000, 000) is needed to provide basic amenities such as water and shelter to the most vulnerable people inside Nigeria.
It is also seeking $135 million (N 41, 310, 000, 000) to help displaced people across the Lake Chad Basin region, where nearly 2.4 million people in total have been displaced due to Boko Haram insurgency, which started in 2009 in Nigeria.
Earlier report by World Bank states that since commencement of the Boko Haram Scourge in 2009, about 956,453 (nearly 30 per cent) out of 3,232,308 private houses; 5,335 classrooms and school buildings in 512 primary, 38 secondary and two tertiary institutions; 1,205 municipal, local government or ministry buildings; 76 police stations have been affected in Borno State.
Currently, the insecurity has spread to other parts of the country, including Benue, Adamawa, Kaduna, Sokoto and Plateau States as well as the South-West, where there had been rise in kidnap for ransom in Lagos, Ekiti, Ondo, Oyo and Osun. There were also similar cases in the south-south and southeast regions.
Specifically, the Nigerian Institution of Estate Surveyors and Valuers (NIESV) recently sounded the alarm on the state of insecurity. “The security challenges in Nigeria today, to say the least, are worrisome. From the intractable Boko-Haram insurgency, which has claimed thousands of lives and condemned several others to Internal Displaced Person Camps.
“The Southern Kaduna conflict, agitations in the Niger Delta as well as calls for succession in the former Biafra Republic, violent clashes between the Fulani Herdsmen and Farmers all over the country, renewed surge in kidnapping in major cities and villages among others, Nigeria is now one of the hotbeds of conflict in Africa,” says NIESV President, Sir Emmanuel Wike
According to him, the crises has huge economic implications on business, including real estate, coupled with an intersection with poverty as a result of rising food prices, which can be linked clearly to the inaccessibility of farmlands taken over by criminal herdsmen and rampaging bandits.
While commending government’s efforts in addressing these challenges, the body called on the government to reinvent and rearrange the entire security architecture and apparatus.
However, feelers from the property market in the regions, especially northeast show that insecurity has affected real estate development (investment) in both negative and positive ways.
On the negative side, “it destroyed thousands of homes and make the populace homeless, however, on the other hand, some desperate real estate investors goes into acquiring those destroyed properties, or properties that are located in a crises area at a cheaper prices and kept it for speculation,” said Jambil Suyudi, NIESV chairman, Bauchi/ Gombe branch.
Suyudi, who doubles as the Head of Department of Estate Management and Valuation, Abubakar Tatari Ali Polytechnic Bauchi, disclosed that though a lot of people have been fleeing Maiduguri, many displaced families have also settled in the relatively safer city. The population shift spiked real estate prices and helped dealers make major financial gains.
He cited instance of a property development firm that had up to 50 clients seeking for places to stay and their service teams were overstretched in meeting the needs of new entrants as prices of properties within the cities significantly increased.
Lately, the prices of those properties have grown massively after a relative return of peace in some parts of the city. People are beginning to return to some of the towns in Maiduguri suburbs. “Those fleeing the attack-prone areas sell their properties at a very cheap rate. A house of N3, 060, 000 people could be offered at N765, 000.”
While speaking on the northeast experience, Suyudi said: “Maiduguri – a dusty landscape of relative peace – is changing fast. In the last few years, dozens of buildings have popped up, and several new buildings are under construction. Investors and property developers have returned to the city. High-end supermarkets, schools, churches, town halls, residential buildings and government-funded camping settlements have significantly increased across the city.”
The Chairman of NIESV, Kano branch, Mr. Salam Oyewumi told The Guardian that people target areas that have infrastructure and relative security in their quest for apartments, especially the Airport axis and Sabon Gari area as well as military neigbourhoods.
Oyewumi revealed that houses and land in those areas have skyrocketed due to their preference by prospective homeowners. He said premium locations attract up to N15 million for a plot of land, while the lowest plot goes for N5 million.
According to him, the Government Reserved Areas (GRA) is being sold under economies of scale. He said investors buy and unbundle them into small sizes, which has now attracted speculators. An unbundled plots, which earlier goes for between N25-30 million is now being sold for N50 million.
He said the commercial properties, which are saturated with informal operators are affected by the insecurity in the area because of the restriction of activities. Oyewumi disclosed that some of the shopping outlets have embraced online marketing, while some estate agents are offering rent discount or dropping rentals as high as 25 per cent to woo tenants.