An increasing number of properties in Lagos’s highbrow Ikeja Government Reserved Area (GRA), as with many other parts of the state, is coming on the market and staying empty for an average of 12 months without being occupied, an investigation by businessamlive.com has shown.
The situation appears to reflect happenings in the economy where fortunes and well-being have fallen and individuals and businesses have been feeling the pangs, with the once celebrated story of a rising middle class in Nigeria now seeming like far distant memory.
A huge gap now exists, say people in the property letting and sale business, between the number of properties coming on the market and the number of people seeking to rent or buy. As the number of people able to afford to buy or let houses in highbrow areas dwindle, occupancy rate is dropping sharply, leaving many properties unoccupied.
The Nigeria Mortgage Refinance Company estimates Nigeria’s housing deficit to be in the region of 17 million and says that only about 100,000 new houses are being added each year to the national housing stock, making it a tall order reducing the estimated deficit.
Analysts say with this startling housing deficit, they are surprised to find many properties in Lagos, the commercial hub of Nigeria, put up for sale, to let or for lease staying that way for a long period of time of between six months and over two years.
Around Ikeja GRA, one of the most sought after residential areas in the Lagos metropolis, the “TO LET” sign can be found everywhere with different types of buildings wearing it like an ornament.
Analysts say while the Ikeja GRA area remains highbrow it has fallen into some decay with only private sector capital helping it to maintain some sanity. The Lagos State government is yet to pay attention to many inner GRA streets and drainage is a big problem. For a reserved area with a lot of history dating back to colonial times, many say they expected the Lagos State government to pay it some attention.
One of the many properties to be seen wearing this sign is a serviced block of flats on Sobo Arobiodu Street, whose realtors, Servada Universal Services, when asked, said has been on the market for a while. Another property on Adeyemo Alakija Street in the same neighbourhood is said to have been on sale for more than a year.
The list of empty properties in the Ikeja GRA neighbourhood is a long one and it reflects what can be found in the different highbrow parts of the state, including Ikoyi, Victoria Island, Lekki Phase 1 among others. Real estate operators say Lagos is not alone in showcasing high number of vacant properties.
Even with the country out of a recession that it slipped into in the first quarter of 2016, the Nigerian Bureau of Statistics says it will be a while before the change will be felt in all sectors of the economy, an indication that the property market still have a little long while yet before it begins to feel the impact through a waking up of demand.
The real time effect of the recession was a downward slip of the purchasing power of most people in the country. With less money and more needs, it is obvious that residing in the highbrow districts will be the least of the concerns of anyone. Will the real estate market return to its glory days of 2007, 2008, 2009 when properties went up and had a waiting tenant or buyer?
Property and estate analysts, as well as stakeholders, have forecast a positive outlook for the Nigerian real estate sector.
The analysts see the sector turning the corner from easing inflationary pressure, improved investment inflows, increased oil production and an improvement of foreign exchange liquidity, which they perceive would contribute to a positive growth outlook for the industry in the near term.
“Whilst there have been some short-term headwinds, there are encouraging signs of market improvement,” says Kfir Rusin, Managing Director of API Events.
Nigeria has faced strong headwinds in the past two years on currency uncertainty and falling oil price and production, which weighed heavily on consumer confidence. But the militating factors are seen to be giving way.
By Ejiro Awhana