Monday, 4 August 2014

"Boko Haram Effect": Real Estate Prices At All Time Low in Parts of Nigeria

The unrelenting violence perpetrated by the Boko Haram insurgents has taken its toll on the real estate sector in most states in northern Nigeria, where the prices of properties have significantly been crashed.

Prices of properties have drastically falling to an all time low, THISDAY investigations have revealed.
Besides crashing the prices of property, especially in the North-eastern states, public property worth billions of naira have gone down the drain through the
destructive acts of the terrorist group.

Governor Kashim Shettima of Borno State told THISDAY recently that more than 900 schools had been reduced
to rubble by the sect in his state.
The destruction of private and public buildings in the region has led to an all time crash of property prices, as has never been experienced in the North-eastern part of the country.

Mr. Mohammed Aliyu, an indigene of Edo State, who relocated to Abuja with his family from Maiduguri last year, spoke to THISDAY, while counting his losses.
He said: “I had a four-bedroom bungalow, with all the appurtenances in a choice area in Maiduguri, going for
N500,000 per annum, yet no buyer has come up for it.
It is that bad. There are many vacant houses and apartments in the city without occupiers. This is what
the insurgency has done to me.”

Mr. Femi Stephen Alao, a Kaduna-based architect and estate developer, said there was no doubt that insecurity has had an adverse effect on the property
market in Kaduna city and adjoining towns.

At Tundun Wada, Kawo and Kabala west, an upscale area in Kaduna city, prices for three-bedroom homes
have nosedived to as low as between N60,000 and N200, 000 per annum. In the past the apartments used to go for between N400,000 and N600,000, he
explained.
“In all of these areas, real estate businesses have ground to halt. You cannot find developers on site
working now,” he said.

However, Alao said that the southern parts of Kaduna, like Gonigora, Bana-Wa, Chikun, Angwua and several
areas of that state were experiencing a hike in rent because a majority of non-indigenes in these zones believe that the areas are safe havens.

A plot of land in Angwua now sells for N1 million, whereas it used to sell for less than N500,000 per plot
a few years back.
Corroborating Alao’s assertion, the Chief Executive Officer and Managing Director of Benue State Investment and Property Company Limited (BIPC), Mrs. Brigid Sheidu, said the security challenges in the north had affected the company’s revenue from its property unit in Kaduna State.

“This has affected our guest house facility in Kaduna township. Unlike in the past, business was booming but
because of the insecurity, we have lost most of our clientele as not many people patronise like they used to in the past. But we hope that things will change for the better,” she said.

Speaking in the same vein, the National President, Real Estate Development Association of Nigeria (REDAN),
Mr. Emmanuel Olabode Afolayan, acknowledged that insurgent activities in the North-east and other states in
the north had done unquantifiable damage to the real estate sector.
He said: “I can tell you authoritatively that nothing is presently ongoing in some parts of the north, except a
few states like Sokoto, Kebbi and Gombe States. In other states, where there is a serious security upheaval,
construction and building activities are at their lowest ebb; this is a big problem for all of us.

“For instance, in Borno and Adamawa States, our members are not building at all. In fact, no bank is ready to provide them facilities in states where there
are security challenges. No workmen are even interested in working in those areas, so transactions in the real estate sector are today almost non-existent.”

On how much has been lost to insurgency especially in the areas affected, he said: “Honestly, it will be pretty difficult to roll out figures now as we are still counting the losses, but what I can authoritatively tell you is that
most of our members have not really lost their building.

However activities are practically at a low ebb." Vice-President, REDAN, North-central, as well as the Managing Director of AIS Ltd, Mr. Sunday Idachaba, said the level of activities as far as the built sector was concerned had no doubt been affected by rising insecurity especially in the North-east.

He explained that the real estate industry involves the movement of various categories of workers like
engineers, masonry foremen and other artisans but when an area is undermined, it would be difficult to go
there to work.
“No matter the amount of money you offer workers, they will be reluctant to work in an insecure environment. So certainly the real estate sector has
nose-dived for now in those areas. People are not willing to buy homes in a place where there is insecurity.
“Property prices have crashed in cities like Maiduguri and Yobe. People are willing to sell, yet nobody is
willing to buy. This is the challenge that we are facing at the moment,” he added.

ThisDay Newspaper