Vacancy factor has continued to rise in Nigeria’s property market due to mass relocation by expatriates to their countries as fear of COVID- 19 grips the entire world. According to the latest report on real estate from the Bismarck Rewane-led Financial Derivatives Company (FDC), the departure of expatriates has reduced the demand for short let apartments in Ikoyi, Victoria Island and Lekki in Lagos and exclusive neibourghoods of Abuja and Port Harcourt where such accommodation is being provided.
The report said: “Vacancy factor is sharply high and there is delinquency on the rise.” The report added that hotels had been closed, while banks are contemplating closing some branches. The outbreak of coronavirus has rubbished January’s FDC report of increased demand for small housing units/apartments in the real estate sector by young professionals and expatriates. Before the outbreak of the epidemic, FDC analysts said that developers had remained challenged by obsolete land laws, sub-optimal infrastructure and financing opportunities.
It is on record that the sector has been in red territory since 2016, having contracted by 3.45 per cent in fourth quarter of 2019. Experts are of the opinion that there had been gap between economic recovery and real estate growth as the sector is still feeling the pinch of lower consumer disposable income compounded by the novel coronavirus outbreak. It has been estimated that over 5,000 properties in Lagos remain unoccupied due to over-pricing and high agency fee.
In Abuja, the number of completed and vacant houses is over 30,000, notwithstanding the high number of slum settlements dotting the city. According to the United Nations Special Rapporteur on Rights to Adequate Housing, Ms Leilani Farha, who was on special tour to Nigeria recently, said Nigerian government has to develop appropriate strategies to deal with the situation, pointing out that most of the unoccupied houses or estates were proceeds of money laundering and other illicit funds.
To reduce housing vacancy factor at this period, real estate practitioners had urged the federal and state government to roll out palliatives that would stop mortgage payment obligations to banks in order to provide succor for the most vulnerable people in the society in the wake of coronavirus outbreak.
This, they said, should also apply to rental payments, while canvassing for downward review of interest rates. They expressed the fear that occupiers of mortgage houses might lose them at this time if nothing is done by government to support them. According to the President, Housing Development Advocacy Network (HDAN), Mr Festus Adebayo, the group is demanding a policy declaration from government to address the struggle of National Housing Fund (NHF) loans subscribers, especially civil servants. With the nationwide lockdown, Adebayo said a few months break from the payment of loans would help subscribers use their lean resources to cater for their families.
Adebayo said: “Those who are living in mortgaged houses might lose them at this time if nothing is done by the government to support them. “HDAN believes that the government can work out a good plan with the Federal Mortgage Bank.” He explained that many real estate developers and mortgage banks were operating based on loans, asking how government would intervene in that respect. Adebayo called on all public and private stakeholders to provide measures that will provide succor to the most vulnerable people in the society. According to him, these were urgent recommendations to government as a way to rescue the vulnerable and poor masses at this time.
Source: .newtelegraphng
