The increasing rate of terrorist activities in the Northern Part of Nigeria has lead to the reduction in demand of properties as well as a reduced rate in property values by 30-40% resulting in a downturn in the property market in parts of the Northern States.
Most of the residents of the areas usually attacked by the insurgents have relocated to comparatively peaceful places in the region while those who are not from these states have completely relocated to workable states down south.
The former Chairman of the Nigerian Institute of Estate Surveyors and Valuers (NIESV), Kano State Chapter, Fred Akinloye, confirmed that the property market in parts of the north (especially the north-east) was passing through difficult times.
Akinloye said ‘’unarguably, people are moving down south. The insurgency is really affecting the construction industry negatively, though there are other factors like the upcoming general elections. Property values have gone down considerably because demand is very low’’.
Mr. Akinloye also revealed that terrorist activities have affected property market negatively such that prices of plots of lands in places like Kano State have reduced by 30-40% from N10mn per plot of land to N6mn-N7mn per plot of land.
He also said that another reason for the drop in the value of properties is the rate in which a lot of properties come into market from those who want to raise funds to execute political campaigns due to the upcoming general election.
‘’Many layouts are now in the market, focusing down prices. Before now, lands in those layouts were selling for N60, 000 per square meter, but now you can buy land there for between N50, 000 per square meter’’ he said.
The former NIESV Chairman added that in the core north-east (Borno, Yobe and Adamawa states), building and construction is not being attempted by people as these places are where recent attacks of the insurgence occurs.
There is also a slowdown in activities in the property market in the Federal Capital Territory (FCT), Abuja, which is one of Nigeria’s most vibrant housing markets. The recent security threats that has occurred twice and caused loss of lives have resulted in loss of investment interest by able real estate investors. According to analysts, this may lead to supply glut.
The high risks associated with property investment in FCT have made both foreign and indigenous property investors to be doubtful of investing there.
Some of the property vendors are pessimistic of a recovery in property prices, explaining that the forthcoming election had also contributed its quota to the pause in the market as investors prefer to play the ‘’wait-and-see’’ game.
The immediate past president of Nigerian Institute of Architects (NIA), emphasised that all aspects of socio-political and economic activities in the northern part of the country is being affected by insurgency.
Private property developers in Borno, Yobe,Bauchi, Katsina,Kano are being frustrated due to the high vacancy rates in both the commercial and residential properties.
Meanwhile, in the mist of the challenges facing private developers in Kano due to insurgency, the state government is upbeat, developing three new housing estates at the moment.
The insecurity in the north have also delayed seven hotel projects valued at N15bn , while a few hotels already completed or near completion cannot be opened due to low patronage and anxiety resulting from insurgency.
According to the report, losses from the botched projects come to about N15bn. These include the Magwan Water Hotel in Kano, which would have cost close to N5bn; the Kaduna Plaza Hotel (about N3bn), and the Bauchi Three-star Hotel estimated at N1.5bn. The remaining four three-star hotels would have cost not less than N2bn each.