Nigeria: Rent hits all-time high in South-South as prices continue to rise

Housing rentals across Nigeria’s South-South geopolitical zone have grown at their fastest pace in decades, according to industry watchers, this is due to the rising rate of inflation, which affects the cost of construction and Construction materials.

At the average annual increase seen in each state before the pandemic, the cost of rent increased by more than 50% for renovated structures and 100% for new buildings.

Many landlords and property owners are taking advantage of the situation to raise rents, while some renters are being forced to move to the outskirts of the city to avoid high-priced properties in the more developed neighborhood.

Home rentals in most areas of Akwa-Ibom, Delta, Edo and Rivers states have grown by more than 100% in the last 18 months.

The rising cost of raw materials such as reinforcement, cement, finishes, paint and other components, which have risen more than 300 percent in recent years, has not helped. The current economic situation has caused the owners to increase their rents.

Currently, more than 80% of Nigerians spend more than 35% of their salary on housing, leaving little money for basic necessities such as food, health care, education, clothing and other essentials.

According to the findings, the average three-bedroom apartment in some of the more prosperous areas, such as GRAs, which was originally N400,000, has risen to N700,000, and in many other areas, N1 million every year.

A two-bedroom apartment that used to cost N200,000/N250,000 now costs N450,000 or more, while a one-bedroom apartment that used to cost N150,000/N180,000 now costs N300,000 or more.

Those who moved to the suburbs caused a shortage of affordable housing in those areas, with prices for available units hitting new highs.

According to Melody Odumah, chair of the Edo state chapter of the Nigerian Institution of Surveyors and Property Appraisers (NIESV), the supply of housing had decreased due to the high cost of construction, and many people using their income to build houses they couldn’t do it anymore. so.

“There is inflation everywhere,” Odumah explained, “which has contributed to an increase in the prices of construction materials.” Those who previously made money through other types of businesses are no longer able to do so due to the rising price of materials. As a result, instead of building houses, people focus on the most important things.

“Investors hoping to get loan repayment from tenants” If you could build a property for N5 million in the past, you can afford more than N15 million today.

He highlighted that the population is expanding day by day and that the demographics are changing, with many young people increasingly separating from their parents to find their own homes.

Mr. Onukak Bassey, a surveyor and appraiser based in Akwa-Ibom State, in the south-south region of the country, said that in more developed areas of Uyo, such as nearby Udo-Udoma, Shelter Afric Estate, Ewet Housing Estate, Aqua-Ima and Abak Road Housing Estate, there has been an increase of 50 to 150 percent, depending on the property’s amenities.

A one-bedroom flat, for example, costs between 300,000 and 400,000 naira, a two-bedroom between 500,000 and 700,000 naira, and a three-bedroom between 800,000 and 1.2 million naira. It costs around N1.5 million and up for a three-bedroom bungalow. “A two-bedroom duplex costs N2.5 million, and the main duplex costs N3 to N4.5 million,” she said.

He went on to say that while rents are rising, it’s not affecting everyone in Uyo because some houses are asking for buyers, while others are opting for distressed properties for sale.

Bassey advocated for a strong government housing policy that would allow the construction of low to mid-level loan-financed housing for the general public, making housing more affordable and accessible.

He stressed the importance of a housing sector that encompasses both the public and private sectors.

Mr. Hamilton Dieme Odome, NIESV Rivers State Branch President, explained that rent growth is a result of supply and demand, with Lagos and Abuja benefiting the most. However, he claimed that rent had remained constant, with a five-bedroom maisonette in posh neighborhoods costing N5 million to N10 million, depending largely on available amenities, and a three-bedroom apartment in the GRA costing N2 . 5 million to N3 million.

He claims that a two-bedroom house in the same area costs N1.5 million and that prices decrease as one moves further from GRA.

A one-bedroom flat in the suburbs can cost between 500,000 and 300,000 naira. When the demand is high and the supply is inadequate, the income will increase. In this scenario, there is not enough demand to need a change.”

There are only a few towns that need housing. Businesses used to provide housing for their employees, but they don’t anymore. He observed that once he approaches the GRA in Port Harcourt, he will be surprised at the number of service apartments that have been vacated by expatriates.

Mr. Chris Okolo, President of NIESV in Delta State, said that renting, which is a return on investment in commercial real estate, cannot function regardless of the country’s socio-economic environment, particularly the current hyperinflation and devaluation of the coin.