Housing: Nigerians bemoan rising rental values ​​amid low disposable income


Most tenants and those looking for new accommodation are struggling to cope as rental values ​​for residential apartments have skyrocketed in most Nigerian cities over the past year. DAYO AYEYEMI reports:

Now is not the best time to be a tenant or accommodation seeker in Nigerian cities, especially Lagos and Abuja.

This is due to the astronomical increase in rental values ​​over the past year.

Apart from the low disposable income of an average Nigerian, which has already been eroded by the general rise in commodity prices, high energy and transport costs and huge unemployment rates, the unfair increase in rents of housing by owners via their guardians is another obstacle. to be traversed by seated tenants and new housing seekers.

Recounting his experience, one of the affected tenants, Mr Willy Ayodele, 45, a civil servant, described most landlords in Lagos as “insensitive”, saying they were insensitive to the plight of the tenants.

“They just believe you should pay all the money they call or vacate their property so they can make more money from commissions, deposits and new tenant agreement fees,” a he declared.

He recounted how his landlord woke up one morning and sent all the tenants of the six units of two-bedroom apartments in Ipaja, Lagos a notice to inform them that the rents for the house had been increased by N300,000 to 450,000 N in one year.

This represents a 33% increase in one year (May 2021 and June 2022).

When they tried to register their disbelief, he said the landlord told them (tenants in place) they had the option of quitting or complying with the new directive.

Despite the fact that the house was built around 15 years ago, he said the owner cited the high cost of groceries and the rising high cost of building materials such as iron bars, cement , tiles and granites as one of the reasons for the increase in rent.

Ayodele, who said his monthly income was not up to N120,000, wondered how he would cope with the new rent, bearing in mind other costs such as school fees for children. children, electricity, food and transportation compete for the lean month. Income.

Weighing his option, he said he would rather pay the new rent than look for new accommodation, which he said would entail additional costs.

Another tenant on College Road Ogba, Lagos, Amos Odusanya, told how his landlord raised the rent for his three-bedroom apartment to N1million from N720,000 a year, being an old building.

For new buildings in the district, he said rental values ​​reach 1.2 million to 1.5 million naira, depending on proximity to the highway.

An incumbent tenant at Kubwa 7, Abuja, KayodeAboye, said rental values ​​for a standalone building in the locality cost between N350,000 and N400,000, depending on finishes.

He added that the high rent was not limited to Kubwa but to other places, pointing out that it was increasingly high in upscale neighborhoods in the Federal Capital Territory.

Apart from the high rental values, he said some of the smaller houses for rent are hard to come by in Abuja despite huge vacant luxury homes gracing the main high profile locations of the FCT.

Fraudulent practices

To make the accommodation situation worse, as many as 70 potential tenants in Lawanson, Surulere region of Lagos State, were recently defrauded out of N60 million by a developer.

According to the report, potential tenants visited the building, which was under construction, to inspect its premises and then made payments to the developers.

After confirming the payments, it was learned that the suspects had issued receipts to the victims and set separate dates for them to take possession of the apartments.

Things then took another turn when people arrived at the house at 16 Zamba Street, Lawason, on the dates specified by the developers, only to find that the number of potential tenants exceeded the number of flats in the building. of a floor comprising 14 apartments.

As many as 120 accommodation seekers have been found to have paid less than 500,000 naira into the account of the promoter, who is still at large.

The real estate agent’s point of view

Speaking to the Nigerian Tribune in Lagos, a real estate agent/caretaker, who manages many houses for landlords, Sulaimon Agbabiaka, said most landlords don’t mess with rents these days.

Furthermore, he added that most incumbent tenants wouldn’t joke about paying their rents either, as they knew the implications, as landlords have zero tolerance for default.

“If you owe rent, you must pay before it expires to avoid being evicted by the landlord,” he said.

Agbabiaka, who is the managing director of Hafisman Property Co, said the increase in rental values ​​in Lagos depends on locations.

According to him, the rental values ​​of two and three bedroom Surulere and Yaba are higher than Ogba, while the rents of the latter are higher than Ipaja.

“If you live in Ogba, you have access to the highway and the cost of transportation is lower than living in Ipaja.

“Furthermore, higher rental values ​​in Ogba and Surulere depend on the serene environment, quality of finishes, fittings and security.”

Despite the high rental values, Agbabiaka said people who needed housing would get it back, blaming the high rents on the exorbitant cost of materials.

According to him, to build a room, it would take two million.

“Tenants are now paying when due and cleaning up the environment to keep their tenancy,” he said.

Another real estate agent, MrToluwaJegede, attributed the rise in rental values ​​in most Nigerian cities to high building materials and the cost of land.

“The cost of construction materials has skyrocketed, the square meter (m²) of land has increased, as investors are in the business to make a profit. Lots of people are running to Ogun State,” did he declare.

Estate agents are calling on governments to look into the matter.

Developers react

In addition to the surge in rental values, property developers said they had embarked on an upward revision of housing prices in their stock.

Most developers said they had raised house prices by 40-50% in the past year, citing exorbitant prices for building materials, high cost of funds and labour; and the high cost of obtaining planning permission and documents.

Speaking to the Nigerian Tribune recently, the managing director of Tobykemsworth Investment Limited, MrAdekunleMonehin, the developer of Honeywells Gardens, said that the rising cost of building materials has forced most developers to reprice their homes at the rise in order to stay afloat.

These materials include iron rods, wood, paints, nails, cement, sand concrete blocks, sharp sand, granite, roof and window materials and labor, among others.

At the teachers’ and broadcasters’ villas, housing estates launched by the company, he revealed that a mini bungalow, which two years ago sold for 4.5 million naira, now costs 6.5 million naira. This represents an increase of 30.78%.

He blamed the situation on the rising cost of building materials, saying, “We have a mini bungalow that sold for 6.5 million naira which was originally 4.5 million naira. While the price has increased because of the cost of building materials.

“When we did the cost a few years ago, the granite was around N140,000 for 30 tonnes. This same granite is now 320,000 N for 30 tons. When we did the math, the cement was 2500 N, but that same cement is now 4500 N.

“A ton of iron rod at that time cost 90,000 naira per ton. It is now N385,000 per ton. The long span roofing sheet – 4.5 inches, which cost N850.00 per meter is now N2850 per meter. That’s why we looked into it,” the property developer said.

Monehin is not alone in this as other developers and housing professionals have sounded the alarm over the negative implications of skyrocketing building material prices on accommodation seekers and home builders.

Most cement pundits and distributors put the blame on the doorstep of the manufacturers, while the latter attributed the volatile currency, uncontrolled inflation, logistical problems and questionable activities of intermediaries and retailers as the main causes. .

Disturbed by the situation, professionals have warned that with the current rise in building material prices, it could be difficult for Nigeria to close the housing deficit of more than 17 million units in the next 20 years.

To deal with the situation, industry experts comprising of former Presidents of the Nigerian Institute of Building (NIOB). MrKunleAwobodu and Chucks Omeife respectively, President of the Association of Housing Companies of Nigeria (AHCN), Dr Victor Onukwugha and former President of NIOB, Lagos Chapter, MrAsimiyu Bashir called on the government to create an enabling environment to encourage more research and local production of building materials in the country.

Omeife pointed out that the high cost of housing has also been negatively impacted by skyrocketing increases in the price of items like reinforcement and cement.

“Every day, the news of escalating prices for goods and materials has become a song that the majority of people have become accustomed to,” he said.

Speaking to the Nigerian Tribune recently, a builder and head of Qualitec Roofing Products, MrAsimiyu Bashir, pointed out that the price of aluminum roofing sheets has also increased.

Expressing his dissatisfaction with the sharp increase in the prices of building materials, Bashir lamented that nothing in Nigeria is controlled by the government but leaving the masses to fend for themselves.

“It is no longer strange in Nigeria that whatever goes up never comes down,” he said. He explained that anything that negatively affects the construction sector, being the biggest generation of jobs in Nigeria, would affect jobs.

Contrary to rumors that other construction work is underway, Bashir said many people have abandoned their sites due to the high cost of building materials.

ALSO READ FROM NIGERIAN TRIBUNE

Previous Nearly a Quarter of US Investors Have Used Loans to Buy Crypto
Next Simplification and possible registration of non-banks on the CFPB regulatory table