As housing prices continue to rise, south-south rent hits all-time high
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Loading... - Aisha Makwando
- 14 Mar 2022
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Cost of rent rose by more than 50 per cent on rehabilitated buildings, while the new buildings increased by 100 per cent in the average yearly increase seen in each of the states before the pandemic.
Many property owners and landlords are taking advantage of the situation to hike rent while some residents are forced to relocate to the city’s suburbs to avoid high-priced property in highbrow areas.
Within the last one-and-a-half year, housing rents increased by over 100 per cent in most locations consisting Akwa-Ibom, Delta, Edo and Rivers states.
The cost of raw materials, such as reinforcement, cement, finishing, paint and other components has not helped, as prices of the components rose by over 300 per cent in recent times. The economic situation has forced homeowners to increase rents on their properties.
Over 80 per cent of Nigerians now spend more than 35 per cent of their income on housing while very little is reserved for basic necessities like food, medical, education, clothing and other emergencies.
Investigation by The Guardian revealed that there has been a surge in rent with an average three-bedroom apartment in some of the highbrow locations like the Government Reserved Area (GRA), which was previously N400,000 risen to N700,000 and in some other places, N1 million yearly.
A two-bedroom, which was previously N200,000/N250,000 now go for N450,000 and above while a one-bedroom which was previously N150,000/N180,000, is currently going for N300,000 and above.
With the development, people who have relocated to the suburbs also created a scarcity of affordable homes in such locations with prices of available units hitting the rooftop.
The chairman, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Edo State branch, Melody Odumah, said due to the high cost of construction, housing supply had dropped and many who were using their salaries to build houses can no longer do so.
Odumah said: “There is inflation everywhere, which has led to increasing in the prices of construction materials. Those that were using money realised from other sources of businesses can no longer do so because the high cost of materials has affected them. So, they concentrate more on things that are most important to them rather than building houses.
“Property investors, who have taken loans to build their houses, expect to recover their investments from tenants. Obviously, if you could build for N5 million previously, when things have not taken an upward trend, to build it now you may need to spend as much as N15 million. The best way to get back the money is to peg the rent at a competitive rate to match the trend in the building materials market.”
He noted that the population is growing by the day, while demography is changing with a lot of youths now leaving their parents to get their own accommodation. “With the increase in population, he said people would demand property amid the limited supply. Read More…
