Located at the seat of the Federal Government, Abuja real estate has
always been directly impacted by actions of Government officials.
Unfortunately a large enough number of these officials are driven more
by personal interest than the public good (corruption). So when the
Administration of President Muhammadu Buhari started its anti-corruption
campaign, real estate was at the heart of most of the allegations. The
sight of ‘EFCC – Keep Out” painted in red on many buildings came to be a
familiar sight. These outwards signs masked a change in the market
dynamics: demand dropped significantly with a resultant effect on
values. Victor C. Ofoegbu. Regional partner – Jide Taiwo and co (north)
explains.
The anti corruption war is a mixed bag of plus and minus. Mixed in
the sense that genuine prices of properties are now being expressed. In
the past, it was escalated and not a true reflection of a properties
real and true value.
The movement of the seat of the Federal Government created an upsurge
in the demand for properties in Abuja which in turn created a rise in
prices as properties were scarce and people, mostly agents and landlords
got greedy. Property usually appreciates naturally and rarely
depreciates. But the increase in demand of properties by large numbers
of government associated workers into Federal Capital Territory led to
excitement and greed amongst agents this automatically led to the
uncontrollable hike in property prices in Abuja. At this rate,
accommodation and properties were almost unaffordable to the common man.
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Then came the monetization policy by President Olusegun Obasanjo. At
this period, the agents and landlords in Abuja started feeling the
effect gradually of the monetization policy. This policy brought with it
some sanitization to the real estate market in Abuja. At this point,
the government, which was a major player and participant in the property
market, significantly reduced its activities in the market and this led
to houses going vacant for long periods and this compelled landlords to
review their prices to enable little movement in business.
However monetization only helped stabilize this issue a little but
did not entirely cure this problem of overvaluation of properties in
Abuja. After the first phase of transition and settlement into Abuja as
the new Federal Capital Territory, which led to the first surge in
property prices and valuation, the second phase of hike in Abuja
property price was as a result of looted funds moving into the market.
Lots of people with free money and had no place to hide it became
players and participants in the Abuja property sector, and so we started
witnessing individuals purchasing large scale properties of about 27-50
properties, paying billions of Naira.
Technically, individuals were hiding money in real estate purchases,
most of which were never rented, just acquired and locked up. Even when
proposals are given to them on how to turn things around they seem to
show lack of interest in that and seem satisfied in hiding their money
in these purchases.
But the game changed after this Government came in. individuals who
would have been in the Abuja property market have slowed down a lot as
the major players in the Abuja property market are now being hunted by
EFCC or know they could or would be targeted soon.
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Overall, it’s a mix-match…. Yes some people have enjoyed the good
days in the past but now it’s time for lamentation. These days, only
properties of low prices like block of flats and bungalows of about
Fifteen to Twenty Million Naira are on the move. So basically, the anti
corruption war has pushed away many players, investors and participants
in the Abuja property market.
But on the brighter and positive note, the anti corruption war is
helping in sanitizing the real estate market in Abuja because the real
and actual prices of properties are being expressed now. No more
additions and padding attached on property prices because it’s
individuals that suffered to make their money that are partaking more in
the Abuja property market now. As such, any buyer trying to invest or
purchase a property in Abuja will conduct proper findings and involve
real estate valuers to get the real value of the property before
purchasing.
So currently, the real estate market in Abuja is more sanitized with
the real values of the properties being declared and professionals being
consulted before purchases are made, unlike before the anti corruption
war when there was money ‘everywhere’ and reckless over hyped deals were
being closed without decency and consultations.
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