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Property and Environment

Expert says market research will reduce vacant houses

Vacancy rate would continue to be on the increase except stakeholders decided to engage in pre-investment market research before mobilizing to construction sites, Professor Olugbenga Nubi, Director, Centre for Housing and Sustainable Development, University of Lagos, has said. With the research, Nubi said investors would be able to decide ahead the housing types that would be the market would need and be able to take.

Vacant houses dotted the skyline of many major cities in Nigeria including Lagos, Abuja and Port Harcourt, Rivers among others. Commenting on the matter recently, Nubi said, it was dangerous and counter-productive to draw a conclusion on reasons for vacant properties without a scientific research.

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He pointed out that most property’s investors were building 4 bedroom duplexes where the need was for studio and 2 bedroom apartments.

“People who need just a room ended up renting houses that they do not really need,” he said, adding that in developed economies, the advent of Airbnb has helped resolve this problem.

Besides, the professor stated that it has been established that in most part of Lagos and Abuja, properties have been used as a means of preserving  ill-gotten wealth.

He said: “Since both local and foreign banks are no longer a good option for money laundering, properties were bought with the intention of future sales.

“Our recommendation to government should be balanced with strong research support.”

He pointed out that all over the world, tenants were vulnerable and were often protected.

According to him, government must change policy that made land to be as expensive as N100 million and high cost of construction.

He said: “If we reduce cost of procurement to less than N75 million for a building of six flats -which is possible in Abuja with it’s stable and high load bearing capacity soil, rent will drop and default will disappear.

Nubi urged institution to sponsor researches, pointing out that the  future is for nations driven by knowledge (information), technology and competition.

According to him, if developers were encouraged to do pre investment studies, they would become more relevant and respected. “We will have few failed projects,” he said.

Corroborating Nubi, another professional, Dr. Joshua Egbagbe, said government and stakeholders should start taking decisions and formulating policies using well researched information that are timely, adequate and concise.

Currently, report from Tayo Odunsi-led Northcourt Real Estate Limited said that vacancy rates in the standard residential apartments hovered around their first quarter’s 2018 figures with Ikoyi hitting 30 per cent, Ikeja GRA -26 per cent and Oniru -33 per cent among the highest.

“GRAs 1, 2 and 3 in the oil city of Port Harcourt recorded vacancy rates of 6 per cent, 11 per cent and 20 per cent respectively and continue to show potential principally for their security advantages when compared most of the city,” the report said.

However, vacancy rates have remained low for the more popular Gwarimpa – 3 per cent, Katampe -21 per cent and Wuse -10 per cent areas of Abuja.

Source: Emmanuel Badejo

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