High rents, recession forcing low-income tenants to suburbs

Mowe in Ogun State... one of the suburbs

Mowe in Ogun State… one of the suburbs

With areas that were once affordable now out of reach, low-income renters are being forced to outskirts and border towns in major Nigerian cities.The soaring cost of renting is pushing tenants away from the centre of most capitals. For instance, Lagos, Abuja and Port Harcourt are now experiencing the highest demand from prospective tenants. The persistent changes of use of certain streets from residential to commercial have also put pressure on property owners to increase their rents for apartments.
   
Studies show that affordable housing is becoming increasingly out of reach for many low- and even moderate-income renters in the nation’s urban centres and their surrounding suburbs, as supply did not keep pace with this growth in demand, vacancy rates decreased, the average number of people living in a rental unit increased, and, in most areas, rents rose.
 
The situation is worsened by the recession in Nigerian economy due to different monetary, fiscal, and political policies that hindered overall business activity, job creation rates and Gross Domestic Product performance as well as Central Bank of Nigeria’s tightening of restrictions on foreign exchange to curb access to non-naira denominations.
  
In fact, young and upward mobile professional renters and apartment-dwellers who often live in cramped, expensive domiciles, mostly within highbrow areas such as Ikoyi, Lekki and Victoria Island and Asokoro are now changing the perception as more and more renters settle in the suburbs and living well outside major city limits.
   
The suburbs have typically been viewed as a cheaper alternative to city living. Indeed, reports show that rental costs within city limits climbed faster than they did in the suburbs. And average rent per square foot in the suburbs was about 30 per cent cheaper than in urban areas. These cheaper living options are at least part of the reason millions of Nigerians have flocked to the suburbs in recent years.

In Ikeja, one bedroom flat ranges between N350,000 and N500,000; two-bedroom flat N500,000 and N1.2million; three-bedroom flat N700,000 and N4.5million and one-room goes for N100,000 and N350,000. In Oshodi, one bedroom flat is between N200,000 and N250,000; two-bedroom N250,000 and N500,000, three-bedroom N500,000-N700,000 and one room N100,000 and N150,000. In Surulere, one-bedroom apartment is rented out for N350,000 and N500,000; two-bedroom flat N500,000 and N700,000; three bedroom between N7000 and N2million and one room apartment between N100,000 and N150,000.
 
In the suburbs like Mowe and other Ogun State border areas, the rent for three- bedroom flat goes between N250, 000 and N300, 000 while a two-bedroom flat goes for between N150,000 and N200,000 depending on the locations. One room apartment goes for N30, 000 and N50,000 while a self-contained room goes for between N120,000 and N180,000.

In Abuja, Investigations also show the rent of a two-bedroom apartment in areas such as Maitama, Asokoro, Wuse II goes for between N2.5 million and N3 million, while one-bed room apartment costs between N1million and N1.5 million and three-bedroom apartments cost between N3 million and N6 million per annum depending on the finishing, location and security of the area.

The Guardian gathered several tenants who were living in the city centres of Kubwa, Jabi, Gwarrippa, Wuse and Utako districts in the Federal Capital Territory are now relocating in droves to nearby States of Niger, Nassarawa and Kogi to find alternative and affordable accommodation for their families following their inability to pay for the exorbitant rents, they hitherto paid before the recession.

In city centres, rents were going for between N1.2 million to N800,000 for a two-bedroom flat. The same two bedroom goes for between N250,000 to N300,000 in adjourning towns in Niger , Kogi and Nassarawa States.

Speaking on the development, a Lagos-based estate surveyor an d valuer, Sam Eboigbe linked the emerging trend to the economic reality in the country.According to him, a large number of people who were initially able to consider choice location to live are not able to do so anymore apparently due to the fact that income flow is no more as it used to be. They therefore have to make up their minds to consider where they can live with less spending.

Eboigbe disclosed that the suburbs are presently experiencing boom because it is hard to find so much of void properties unlike, what is happening in choice areas like; Ikoyi, Victoria Island, Lekki where there are a lot of void properties and even those properties that are occupied right now, you will find out that a lot of tenants are owning huge rents.

Another estate surveyor and valuer, Mr. Emeka Okoronkwo of Kings Court Realtors, said the relocation of renters to suburbs is expected due to the constant encroachment of commercial developments in residential areas.

He blamed the situation on lack of data, futuristic planning and complete abandonment of governance by the authorities.Okoronkwo said most suburbs are blighted areas without proper planning and infrastructure, which will in future create problems for the government.

One of the affected tenants, Mr. Abiodun Aremu, a stockbroker, who once live at Adelabu area of Surulere told The Guardian that he opted to quicken the development of his house at Mowe in Ogun state rather than pay for the increase on his three bedroom apartment from N350, 000 to N550, 000.
 
Aremu, who has been living at Surulere for about ten years because of the proximity to his office in the Island, said he has an option to either pay for two bed room in areas like Mushin, Ijegun and Ikotun, where there are lower rents or complete part of his house at Mowe and move in with his family.
 
Asked if there is any sense on the movement, he said despite the mobility and logistic problems, he felt that his presence in his plot would help in further development rather than continuing rent payments.
 
Also, Mr. Johnson Mmaduka, who relocated from Ikosi –Ketu to Ibafo in Obafemi-Owode local council, Ogun state, said the movement was caused by his retrenchment from his working place at Apapa, Lagos.According to him, in Ketu, he was paying N250, 000.00 for a two bedroom flat, before it was increased to N300, 000. He said when a friend offered to collect N150, 000 from him for a two-bed room flat; he had to jump to it.

 
Mmaduka said, it was a relief even though, he has to make do with the dearth of infrastructure in the area.For Eboigbe,  “there is boom in the suburbs even though it is only temporal because we are hoping that things will get better. Again we are thinking that the present economic reality is making people to confront the obvious and making people to be very real because it is now clear that before now some of us were living a fake life. Now you have to scale down part of your house rent to pay school fees. If you look at landlords and property agents in the suburbs, they are experiencing boom.”

He explained that at present lands are not even available in the suburbs and what people now do was to develop dilapidated structures with a view to re-mould them into blocks of four-flat, six-flats apartment to their taste and to the advantage of the boom in the suburbs.

He stressed that a lot of developers are also taking advantage of the situation by relocating to the suburbs to be part of the largesse in the area.“People are buying dilapidated structure to reconstruct them into what they want in estates like River valley, areas like; Abule Egba axis, Yaba axis, Oko-Oba, as well as Ayobo area.

In this article:
Emeka OkoronkwoRecession
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2 Comments
  • infinity2020

    The fleecing of Nigeria started from 1967.and the greed and the pricing of Nigerians out of the global market has been going on since independence. We are just on a journey to a real economy. If PMB can keep this tempo on water will eventually finds its own level. Those people renting out a one bedroom for N1.2 million will soon realise that its no longer business as usual. The inflation in housing sector is almost 500% the minimum wage is N18000 the money being looted in the treasury is drying up contracts are becoming scarce . Whistle blowers are all over the place.so things have to change !!!!!

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