The property market in some northern states of Nigeria has been adversely affected by the destructive activities of Boko Haram, an Islamist religious sect which has been bombing targets, including police stations, recreational centres and churches, with the attendant loss of lives and properties.
Many homes, offices and warehouses in targeted northern states, including Borno, Bauchi, Kano, Sokoto, Kaduna, Plateau and Adamawa, are now empty, as a result of the mass exodus of private and public sector employees and business people (most of whom are non-indigenes) from the region. The onslaught of Boko Haram has claimed hundreds of lives and destroyed properties worth billions of naira, forcing many survivors to flee to the south.
Heightened insecurity in the region has seen demand for properties falling sharply, causing prices to fall by between 30 and50 percent in many of the affected states.
Close market watchers say many of the residents who have left the region for the south, have no intention of returning, pointing out that many of them have rented houses or have started building their own homes, making investments in places such as Lagos and neighbouring Ghana.
Kano and Kaduna, the most flourishing cities in the north, are the most affected, having recorded the worst devastation from the activities of the sect.
In Kano, BusinessDay investigations reveal that the mass movement of people out of the state has led to high vacancy rates, as many commercial and residential properties are now empty. This has forced the prices of commercial properties in highbrow districts such as Murtala Mohammed Way and Ibrahim Taiwo Road in Kano to fall sharply, just as the prices of residential properties in the Government Reservation Areas (GRAs) have also dropped significantly.
Low income properties are not left out, as areas like Sabon-Gari and Zoo Road, also in Kano, have recorded sharp price declines, following the flight of many of the occupants, to the south.
Industry experts, who confirmed this development to our correspondent, noted that the price of three-bedroom apartments which stood at about N350,000 per annum, before the crisis in these places, have come down to between N200,000 and N250,000.
Fred Akinnuoye, chairman, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Kano branch, described the situation as “worrisome”. “It is true that the sector is currently experiencing serious challenges due to the series of attacks we have been witnessing. People are moving out of the state, leaving behind a good number of vacancies in the property market”, he said, disclosing that the market is experiencing vacancies in all its segments.He said the vacancies were more pronounced in the rental market.
In Kaduna, analysts say the property business is witnessing another difficult phase, years after the Sharia riots which swept through the north in 2000 with the attendant exodus of non-indigenes.
Aliyu Mohammed, a property manager based in Tudun-Wada, told BusinessDay that business has remained low, while profit margins have dropped drastically because most of the people who are into property development in the north are southerners, especially Igbo people.
He said that apart from being good buyers of prized properties, the Igbo are also into building and selling, pointing out that many of them have business partners and relations overseas who support them in the property business. “Because of the state of insecurity, especially suicide bombings, they are rethinking long term investment in the state”, he said.
Emmanuel Nnaji, also a property manager, however sees opportunities in the milieu, noting that “this is the right time for people to buy properties in the north because they are cheap in any location within the metropolis. According to him, a six-bedroom duplex that cost N22 million before the crisis, now sells for N15-18 million.
He added that such properties were available in Barnawa, Sabon-Tasha, and Kakuri areas of the Kaduna metropolis. He pointed out that because of the way Kaduna metropolis has been divided along religious lines, North and South, properties are more expensive in the Christian dominated south of Kaduna city.
“While a plot of land is now sold for N2.5million in Romi area, the same plot allocated at the same time by the administration of Governor Ahmed Makarfi in 2006 was sold at the muslim dominated area at N1.8 million and N2 million”, he said.
He said the property business could be considered dead in some areas in Kaduna, such as Tudun-Wada, Rigasa and Angwan Dosa, because of the volatile nature of the environment, adding that “once a property is introduced into the market, buyers would promise to get back to you, but would not come back”.
Nnaji said the bomb blasts in Kaduna metropolis had also pushed up rents for two-bedroom and self-contained apartments in Sabo, Barnawa, Narayi, Kakuri and Goni-gora areas of the metropolis, because the blasts have led to migration of people from the northern to the southern axis of the city. A two-bedroom flat, it was gathered, goes for between N200,000 and N250,000 in Barnawa, while in Sabo and other areas considered as unsafe, the same type of properties go for N150,000 to N180,000 and there are possibilities that rents could be reviewed upwards in these areas before the end of the year if the bombings by Boko Haram continue.