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Rent decreases as recession worsens

+ Tenants owing more than 2 years now a trend – Experts confirm

2016 was certainly not the best for many businesses in Nigeria. And the multiplier effects affected and are still affecting many aspects of human endeavour in the country, including rent.

ENCOMIUM Weekly’s investigations revealed that rent all over the country really declined as recession worsened, especially in the last quarter of 2016 which led to many property being vacated for months. This, however, forced the landlords of such property to bring down the rent to the amount that was commensurate with the economic dictates of the time.

Confirming this scenario, Property expert, Ubi Uzor of Obi & Co, Ogba, Lagos, said the ongoing recession which started last year, has really affected not only rent but property business generally due to lack of money in circulation.

He, however, pleaded with the Federal Government to swiftly embark on the economic policy that would encourage foreign investors, new and existing entrepreneurs so that the economy would be re awakened before the end of second quarter of this year.

According to Uzor, there is poverty in the land, and people’s priority at the moment is how to feed their families, not paying any exorbitant rent. And that’s why some landlords were left with no option than to reduce the rent pending the time the economy would pick up.

“Property business since the beginning of recession in Nigeria has gone down due to lack of money in circulation. Those that are not well to do are only thinking of how to feed their families, therefore abandoning rent.

“Before now, some landlords who were hell bent on two year rent are even begging for one year now due to the present economic situation. Even, some that, on a good day, would put the rent of their property on the high side have stopped doing so because they have noticed that people shun such property. Some of them were forced to reduce the rent of their property to attract tenants.

“A lot of buildings on the Mainland and the Island are vacant now due to high rent. And they have to remain like that until their owners bring down the rents to barest minimum because there is no money in circulation at the moment. And no one will bid for them unless the rent is cheaper.

“My advice for those in need of property is that this is the right time to bid for one. Properties are cheaper to acquire now as rent is also cheaper than ever. Property worth N45 million in Magodo or Omole, Lagos now is being priced as low as N25 million. And an apartment which, before recession, was N2 million per annum is now N1.2 million in those areas. Even the agents that usually demand 10 percent commission now give room for negotiation.”

Asked whether a lot of tenants now owe their landlords up to two or three year rent, he swiftly reacted, “Yes, that’s even the order of the day, so common now among tenants. And if they’re issued quit notice, some won’t even leave. That’s why you hear of crises between landlords and tenants, that was even rampant in 2016.

“Up till now, we have some tenants owing more than two year rent and they’re not ready to quit. Some landlords have resigned to fate on many of them. The common excuse for their inability to pay is the poor economy. Some have even lost their jobs. That’s why some landlords are now taking things easy with their tenants, especially in Lagos here.”

Corroborating Uzor’s submission, an Abuja based estate and property developer, Tunji Asafa said, “The rent in Abuja has also come down. Even, in some places, by 20 percent because of the economic situation of the country now. And this has had adverse effect on property business generally. Many houses are left unoccupied due to lack of money in circulation. Most property owners had to reduce the rent of their houses in line with the situation in the country. Even, at that, people don’t occupy them.

“Abuja is lifeless, business wise. So, money is not flowing. Any attempt by any landlord to further increase rent will be regretted because people won’t call for such an apartment or building.

“In some cases, there are series of accumulated rent within and outside the city of Abuja now. Things are just so terrible everywhere.

“The only solution to the present economic situation is for the government to initiate a policy that would support foreign and local investors so that the economy would bounce back. With that, there will be more money in circulation and Nigerians can live comfortably. It’s only those that feed well that will remember to pay rent. That’s why most of us are redundant now.”

– TADE ASIFAT

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