Real estate development is certainly a very expensive venture, and for the developer to recoup his investment and make the business sustainable most especially in the type of Abuja economic environment the end products must be as expensive as the prevailing situation.
The only reason why the various real estate businesses in the city are not crashing as it would in the global arena are the source of the wealth for financing the projects, which the majority are product of public fund mismanagement or other forms of corruption. Otherwise it is unimaginable for a development to remain unoccupied for years, instead of dropping the price to make it accessible for mutual benefits, the developer remains unmindful and asking for higher rents each year, without minding the loss of personal revenue for the period the houses were vacant.
Many property developments of the eighties and nineties located in prime locations of the city are now out of turn with the prevailing architectural designs. The source of most of the wealth would be misappropriation from public offices, which obviously was unsustainable. Most of the owners were either demise or long retired from service and are now down and out, in need of means for sustenance. If they are private property developers, the person providing the opportunity for acquiring effortless fund would no longer be in power.
A sitting government would be persecuting functionaries of its predecessor for corruption, by seizing properties allegedly considered as products of corrupt enrichment, at the same time orchestrating a worse crime. This is akin to a kettle calling a pot black. Most of these properties are centered on Abuja, because of high cost of land, as a result of excessive demand. This is where the worst form of corruption on landed properties and land administration is taking place today.
The prevailing persons now at the helm of affairs would also source for prime locations in the city. Due to the prevailing prohibitive cost of land, the target is the location not the building. For those who do not have the power to revoke or influence revocation, it is more economical to buy the old properties from the owners at distress values and develop same according to their desired taste.
They can afford to buy the whole property and demolish to ground for their new luxury mansions. In line with the vicious cycle, they cannot also maintain when the source of the ill-gotten wealth eventually ceased.
At the beginning of the global economic melt-down we were earlier deceived that Nigerian economy was immune from the impact that rocked all the nooks and corners of the globe. Subsequently we knew better when we witnessed the magnitude of the crash in the stock exchange in 2010.
It is a known fact that prime mortgages crisis resulting from paucity of funding real estate, acquisition and building new infrastructure is the major catalyst for the melt-down, property rates being the major casualty came down crashing like a pack of sand. In Dubai which economies depend on real market forces and strong public check and balance with its largest shopping mall in the world, real estate value were halved. Even the once celebrated world tallest building was reported to have faced serious challenge on how to recoup its investment during the melt-down.
Our financial institutions have been facing insincerity in managing public funds. The CBN was reported to be sanitizing and injected a lot of funds in arresting so many casualties, from the collapse of the financial institutions to the undesirable ripples it would have generated in the real property market.
The fact is we still have a long way to go considering the insincerity on the part of our policy makers, who only make noise by pointing accusing fingers, blaming our woes on others at the same time turning their backs and perpetrating worst crimes, irrespective of the adverse consequences they generate to the larger society. The cost of acquisition of land for real estate development in the city is always on the rise with succeeding FCT Administrations. It is now at its zenith.
True to our tradition of alienations to the people in power, we used to have the friends of Jeremiah Useni, friends of el-Rufa’i, friends of Bala Mohammed. It is now the turn of Nyesom Wike. The obvious target is the acquisition of as many lands as possible before their tenures come to end.
The land factor which the authority waives to contribute to the lowering of the cost of housing is being abused. Typical is the Mass Housing program, that is when the program still exists. In the sense that the deserving developers who are the genuine property developers do not get the allocations, but the unsustainable developers. While the genuine developers purchase from them at speculative rates.
Invariably, with the high cost of building materials, labour and the provision of infrastructure, when the genuine developers are ready to market the end products the mass houses are no longer affordable to the masses.
Renewed hope on affordable housing would continue to be hopeless. Obviously, the only hope that would mitigate the circumstances, is on any future government that would crack on the sources of ill-gotten wealth, specifically land related.
