There are indications that the nation’s capital, Abuja, is currently witnessing appreciable decline in payment of tenancy fees. LEADERSHIP findings showed that there is a 30 percent decline in the rent in major areas of the FCT including some high brow areas.
Our correspondent reports that drastic change in purchasing power of most middle and low income earners which led to the increased number of unoccupied houses in the Federal Capital Territory (FCT), could be partly responsible for the drop in rental value.
Statistics revealed that the Federal Capital Territory (FCT) currently has over 7 million population that were not hitherto captured in the master plan.
Regrettably, the low income earners who constitute over 80 percent of the workforce in the city are battling to meet up with their tenancy fees. Further investigation by LEADERSHIP revealed that default in payment of annual rental fees as agreed between landlords and tenants cuts across every location in the FCT except the slum settlements where houses are poorly priced.
According to findings, in satellite towns of Kubwa, Lugbe and Jikwoyi, the inability of tenants to meet up with their rental obligation have forced few landlords to cut down the rent by significant percent even though some inflated the fees, citing economic reasons, old tenants maintained the old rent while the new tenants benefitted from the cut.
For instance, a one room self-contain that was rented for N250, 000 to N300, 000 in 2016, now goes for between N200, 000 and N250, 000. Also, a 1-bedroom flat now goes for between N400, 000 to N500, 000 while a 2-bedroom flat goes for between N600,000 and N700, 000 depending on the location and facilities available in the property as against the initial price of N450, 000 or N550, 000. However, the major crux of the matter is the default in payment of rent.
It was also discovered that landlords have been forced to collect the annual rents in two or three batches as tenants battled to contend with the economic hardship.
One Mrs Martha Joshua, who resides in Aco estate, Lugbe area of the FCT commended her landlord for accepting the rental fees in two batches, describing him as a man with a heart of gold.
Also, one of the landlords who preferred anonymity said that instead of leaving the house vacant for a long time, he has reduced the rental fees to accomodate new tenants, saying that he warned them never to disclose it to the old tenants.
“This is because of the state of economy and instead of living the houses vacant, I collected the rent in two to three tranches,” he said.
The default is also minimal in highbrow areas of Maitama, Asokoro, Gwarinpa, Wuse 2 among others, a situation that has led to growing number of completed and vacant houses. An on the spot assessment revealed that over 30 percent of the houses in these areas are vacant while some remained unoccupied since it was completed in 2015.
For instance, a room self-contain that was hitherto rented for N300, 000 to N350, 000 in 2016, now goes for N400, 000 to N550, 000 depending on the type of facilities in the houses.
The same rule applies to other categories of housing in the area, even as old tenants have splitted the rental fees into two to three tranches in order to meet up with other pressing needs. They said this has further forced many civil servants to seek alternative shelter at the suburb or slum settlements.
A resident of Gwarinpa in Abuja, who gave his name as Mr Kennedy wondered why federal government could not pass a law mandating landlords to create uniform rates in all the houses.
He called on FCT administration to seek for alternative means of building for low income earners. A Cross section of stakeholders who spoke with LEADERSHIP described the decline in payment of tenancy fee to the wobbling economy even as they pegged the sharp drop at over 40 percent.
Managing director of Justin Okpu & Co limited, a facility management company, Prince Justin Okpu said that since rental fees are artificially fixed, tenants could no longer meet up with their obligation. “The prevalent fees do not reflect the actual currency of the economy and failure of tenants to pay has affected rental responsibilities like renovation of the houses.
Okpu listed the implications of default in rental payment as overbearing pressure on the courts brought by landlords and tenants dispute, biased justice on dispute issues, high rate of vacant properties, increase in redundancy in real estate investments.
He said this would lead to a shortfall in the country’s Gross Domestic Product (GDP) even as he pegged the decline on payment of rent to 40 percent. He emphasised that low-wage regime among the able work-force of the population and high rate of unemployment are the major reasons for the decline.
The expert said that high-rate of rental default are more prevalent in high-brow areas and middle-class neighbourhood as well as some sizeable number of low-income neighbourhood. In his contribution, a former president of Nigerian Institute of Town Planners (NITP), Tpl.
Steve Onu stated that the decline in tenancy rate is as a result of low disposable income and very high rental outlay. He noted that the implication for the built sector is that there would be low rate of returns to the property owners as well as high vacancy rates.
A developer, Arc Adewunmi Towolawi Okupe noted that if the cost of houses are moderate and targeted towards particular income group, affordable housing would be achievable.
He stated that a tenant who lived in a rented apartment for over 20 years must have paid more than enough to build the house. Okupe blamed the decline on the ailing economy which has adversely affected household income as well as rental capacity of tenants.
42 total views, 1 views today
Generalbaze Video Of The Week