November 07, 2016

Recession Forcing Down House Rent In Abuja

If there is anything many residents of the Federal Capital Territory are happy for about the economic recession, it is that rent has become more affordable and they can now pay for better accommodation. Tenants and estate agents spoke to Daily Trust about it.

Grace Adesewo, 36, with her husband, are expecting the arrival of their first baby. They were living in a two-bedroom apartment in a block of flats in Garki, Area 8, Abuja. The space was too small to accommodate a new baby who needs a cot and a chest of drawers among other items, first time parents would have gone all out for. 

Mrs. Adesewo, who resumed work three months after putting to bed, invited her mother to help her nurse the baby. In May, 2015 the couple began house-hunting.

Although the couple had saved N2.5million which was the going rate for a three bedroom flat in the part of Garki they wanted. But in the end they paid N1.5million for a three-bedroom bungalow with two-room boys quarters and an ample parking space for no less than five cars, in Prince & Princess Estate, Abuja, in January 2016. 

The house had been vacant for almost a year when the rent was fixed at N2.5million. Over time, the rent reduced as a result of low patronage. The Adesewos’ ability to bargain with the landlord and their willingness to pay for two years’ rent in advance, worked in their favour.

Mrs. Adesewo said: “Although we didn’t have the money to make up the balance for the second year, immediately, we were able to appeal to him and he agreed that we paid it after six months.”

She teased: “There was no way we were letting the house go because the apartment was beyond our expectation and we didn’t have to worry about accommodation for another two years. We can even rent out the boys quarters and use the money to offset our debt.”

Daily Trust reports that the story was no different for Osita Anosike, 33, who moved from Gwarinpa to Ademola Adetokunbo, Wuse 2, Abuja, in September, 2016.

Anosike, who is a manager in a departmental store in Abuja, said: “Three months to the expiration of my rent, I began house-hunting. After three weeks of searching an agent told me he had found a self-contain apartment in Wuse 2. 

The bachelor who didn’t mind forfeiting two months’ rent in his old apartment, said: “When he told me the location and that it was going for N400,000, I jumped at it and immediately paid. Not only is it closer to my workplace, the rent is the same as my old place.”

In the last one year, Nigerians have battled with the ripple effect of recession. The one thing that has comforted many of them - especially those in the FCT - is that they can now live in accommodations of their dreams or something close to it. With many houses lying unoccupied and wasting away, landlords are forced to reduce the cost of rent. 

Agents have also implored more aggressive marketing strategies and platforms like advertising online and posting advert signs on street light poles and so on, announcing vacant premises. 

On a website, a self-contained apartment in Asokoro was advertised for N600,000 as against N700,000 to N800,000 a year or two ago.

Also rent for office spaces are crashing because some business people like Sefina Idris, who sells shoes and corporate outfits, find it cheaper to trade from their cars, homes or rent a space in somebody’s shop just to display their wares.

Mr. Patrick Obinna, a small-scale estate agent operating from Zone 4, explained the trend.

He said: “If you look around town, you will find several empty plazas which although are tastefully finished, have been unoccupied for at least one year. They are in Utako and Wuse among others. People who have space in their homes make use of that or come together to rent offices. Each person simply demarcates his work space.”

Obinna said: “Landlords want money on their investments and tenants now have choices and don’t suffer as much as they used to. Some office spaces have gone down from N35,000 per square metre to N30, 000 or N25, 000.”

Ejike Charles, who has been an agent for 10 years specialising in clients who want accommodation in Maitama or Wuse areas, explained how the recession has affected the cost of accommodation as well as landed property.

He said: “Before a Wuse 2 or Maitama self-contain apartment cost between N500,000 and N600,000. Two-bedroom flat was N1.5million. But many of them were empty.”

Charles said: “Some landlords, who don’t want to leave their property empty throughout the year, have reduced the rates because they also understand the situation of the country. 

“Presently, one can get a two-bedroom flat for N1million, three bedrooms for about N1.8million to N2million, while a self-contained can also go for N350,000 or N400,000 depending on how new the property is,” he said.

Despite the rent crash, Charles said there were several empty houses in the metropolis as the recession still made it impossible for tenants to pay the rent.

When asked if landed property have also been affected by the recession, he said: “The landed properties have not really been affected because you find out that a land can remain for many years and nothing will affect it. Unlike a house which if you leave empty decays.

“The prices of land are still almost the same except in cases where someone who wants to sell his land decides to reduce the price,” he said.

Rent rates of duplexes have hardly decreased Charles said. “In Wuse, those with five bedrooms and boys quarters still cost between N8million to N10million for rent and around N120million if they are to be sold. In Maitama rent for such duplexes is still around N15million to N20million.”

Do these relocations by tenants mean more business opportunities for agents running these small scale enterprises?

“I wouldn’t say that it means more business, but some of us are making more on commissions,” said Obinna.

He said this is because people who would ordinarily rent houses in Garki or Wuye can now rent in Asokoro, Wuse or even Maitama if they are lucky.

“The rents of some of the properties in prime areas are in some cases almost at par with rates in the less prime areas. We now have more clients renting apartments in these locations, thus giving us more commission.

“Clients, when they compare distance and the prestige of having a Maitama, Asokoro or Wuse address, don’t mind paying the difference and living in these part of town.”

Abdul Muhammad (33) an agent in Lugbe, said the rates of houses there have also reduced as most tenants find it difficult to renew their rents let alone move to new accommodation.

He said: “A two-bedroom flat, two years ago, used to be between N500,000 and N600,000. They are now between N400,000 and N450,000. A self-contained which was around N250,000 and N300,000 now costs between N200,000 and N250,000. 

Muhammad also added that he observed a lot of people who lived in the metropolis are now moving to the outskirts for cheaper accommodation there. Gana Umaisha is one such who said he moved to Dutsen-Alhaji which is cheaper than Dawaki so that he could begin developing his own property.

Good roads, little or no traffic congestion, beautiful landscapes, street lights and better security are among reasons which have encouraged Abuja residents to move to prime areas and others like Katampe, Jahi, Life Camp and Karasana where they would not have given second thoughts to. 

Many landlords are no longer shylocks and are willing to collect only one year’s rent instead of two as they formerly insisted on in the past.

6 comments:

ats three said...

Really? So something good can come out of this recession. Cool.

eniola lawal said...

Issokay

Harbolarkale Niyi said...

Some landlords are still adamant of renting their houses two bedroom apartment in Sunnyvale Estate at #1.6million

Hassan Aderemi said...

The market force at work. The lower the demand the lower the price.

Kay Heavy said...

Interesting! No free money again

Anonymous said...

Some landlord no send you, them go even increase rent and say Dollar don go up. Nick