Why Many Highbrow ABUJA Mansions Are Empty

Right now, many Abuja real estate players are in trouble. This is because business is not as rosy as before. Since the recession settled in, real estate activities have slowed down drastically because unlike before, there is no free money in circulation. And wait for this, many of the magnificent mansions in highbrow areas in Abuja are empty as To LET and FOR SALE sign hang on many gates.
So, what went wrong? City People Abuja Real Estate column gathered that the effect of the decline of the naira against major foreign currencies like the dollar rendered transactions in real estate in Abuja unattainable to the medium and low income earners. This drop in naira value also largely affected the apex bank’s borrowing mechanism and less businessmen could afford it as the banker’s bank tightened its lending window.
Although, a lot of houses were out For Sale and rent, the harsh economy gave no one the muscles to venture whether for office occupation or residential and so many of the completed buildings churned out became redundant despite drop in prices.
The lending to the sector was anything but cheerful and, according to a Central Bank of Nigeria’s report of November 2016, interest rate on prime lending to real estate activities from 26 percent of lending banks was between 24 percent-29 percent per annum and 18 percent-23 percent per annum from 52 percent of lenders.
The maximum lending rate from most of the lending banks (87 percent) was between 24 percent-36 percent per annum. Mortgage financing to property buyers did not fare better, with unpleasant consequences for dreams of potential property buyers and real estate operators.
Both commercial and residential real estate have taken a hit from this crisis which has brought about a slow-down in market transactions across the country as demands for real estate assets dropped significantly, leading to price fall, especially at the high end residential markets where demand, by the third quarter of the year, dropped by about 20 percent..
Though construction activities were seen here and there with a few mansions, residential, retail malls and office towers springing up and changing the city skyline, the real estate sector within the year had a fair share of the impact of economic headwinds as subdued demand and buyer supremacy defined market transactions, leaving investors and developers in sobering moods.
Again, falling national revenue, a liquidity squeeze, decline in foreign and local investment, high-interest rate, weakening currency, low productivity and contraction in GDP growth all culminated in an economic recession that crippled consumer purchasing power and almost dried up an appetite for investment. Virtually, all sectors of the economy have been affected and businesses were struggling to remain afloat.
However, the second factor affecting real estate business in Abuja is the change of government. In the past administration during Jonathan regime there was cash flow, embezzlement, money laundering, etc all over the country where politicians and some public servant steal government money to acquire properties, they ran into real estate investment to fixed their money, building houses everywhere for personal ego, some even bought and rented houses for their girlfriends etc
The change in government really affected that as there is no longer room for embezzlement, the people that still have the money are even afraid of spending it on real estate as most houses in Abuja are under EFCC watch and radar. So, this really drive politicians away from property
Another factor that affected real estate business in Abuja is Demand and Supply, in Abuja presently there are much supply of properties with less demand. Most houses at the prestigious area like Maitama, Asokoro, Wuse II are empty, people can no longer afford to pay rent in those area due to economy recession in the country, houses are been reduced both in sales and letting due to poor demand, there is vacancy everywhere and this is one of the area estate surveyors get their money, the higher the rent ,the higher the commission, the higher the sales ,the more profit they get. Real Estate business has dropped drastically from the previous value and this really affects real estate business in Abuja.
Funmilayo Asaolu, Our new real estate columnist and Reporter is an experienced professional, based in Abuja. She had her ND and HND at Rufus Giwa Polytechnic, Owo, formerly Ondo State Polytechnic. She did her one year IT at the Ministry of Lands and Housing in Ondo State. She has also worked with the estate firm of AKINLABI AKINTOMIDE & CO. She did her youth service at the Federal Ministry of Power, Works and Housing as an Estate officer.