There is a gradual disappearance of low-cost houses from city centres, experts have revealed following property price hike which cause by a growing trend whereby property developers equip their houses with top-of-the-rang e facilities, such as luxury interiors.
“It is obvious that low-cost housing units are diminishing from city centres because luxury apartments are the order of the day,” says Olusesan Ogunyooye of 3Invest Limited, a real estate advisory firm.
“Most real estate developers have opted to build only for high income earners,” he says, noting that this has been informed by the desire to re-coup their investment as soon as possible, or repay loan facilities taken from banks to finance the project.
Ibidire Adetunji Lams, the developer, Freshland Estates, attributes the high cost of property to a number of factors including high prices demanded by native land owners, cost of processing land documents plus internal revenue fees and land bureau charges.
Ibidire affirms that low-cost housing is disappearing from city centres due, blaming the trend on the cost of providing basic infrastructure, especially roads in remote and virgin areas, saying “all these factors have played a major role in skyrocketing property prices in major city centres, thereby denying low income earners the opportunity to own properties.”
According to Tunde Gbadamosi, developer, Amen Estate, the government has seemingly failed in its responsibility of regulating the sale of land at uniform prices, hence the huge fees demanded by native land owners.
“Moreover, if the so-called low-cost government houses are not affordable for low income earners, how much more houses built by private developers?” Ibidire queries.
On the role of financial institutions to aid private estate developers with loan facilities, Ibidire condemns the ploy by banks to only provide loan facilities at 24 percent interest rate to big time estate developers.
He notes the general apathy by construction material manufacturers to augment private investors’ efforts to reduce the present 16 million housing deficit in the country by providing “soft-landing” schemes for developers.
“This negates the inclination to build for low income earners, thereby restricting developers to only high income earners who can pay,” he adds.
Gbadamosi lists other factors contributing to the hike in property prices as high cost of physical planning, transporting construction materials to site, lack of power to produce some sanitary wares such as ceramics, which require a high degree of heating to produce, hence the need to import.
According to him, the inefficiency in the ports also contributes a great deal to the hike in property prices as some of the facilities including perimeter Closed-Circuit Television (CCTV), private suspended galleries, double spa (Jacuzzi), swimming pool, gymnasium, jugging trails, artificial football field, lawn and lawn tennis courts, squash court, and a golf course, are often delayed in the port, forcing the developers to pay demurrage.
Also common in some estates is either distribution transformer for independent power generation or a standby generator in place to power the entire facilities in case power supply fails. “All these costs are borne by the buyers at the end of the day,” he says.
Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited
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