Rental defaults in Nigerian are now on the rise as a result of micro and macro economic conditions in the country that have seen inflation rate rise to 13.7 percent and fuel price hike with the attendant high cost of goods and loss of jobs.
These lead to a sharp and considerable drop in disposable income of most Nigerians.
This development, experts say, has further worsened the situation in the country’s housing market where there is a 17-million housing units deficit even as an estimated 80 percent of the 170 million people in the country live in rented accommodation and spend about 50 percent of their monthly income on house rent.
Real estate sector practitioners, especially estate surveyors and valuers who are estate agency professionals, say the current economic situation has hit this sector hard, leading to loss of part of their legitimate instrument of income.
The surveyors, under the aegis Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos branch, have decried the state of the economy and what they called geometric progression in expenditure by Nigerian citizens when their income in arithmetic progression, resulting in several cases of rental defaults and litigation.
“About 80 percent of all properties under my care have defaulting tenants who were previously meeting up their obligations; some sectors, including oil and gas, that were hitherto known to offer job security have been the worst hit lately,” said Orimalade Olurogba, the institution’s vice chairman.
Continuing, Orimalade said, “what is most worrisome about this development is that the sectors, which were termed to be secure, such as the oil and gas industry, are now the jobs that are most insecure. A lot of people are being retrenched; the high end or the upper middle class people working in oil companies and who live in Victoria Garden City (VGC) and Lekki Phase 1 and other areas whose rentals are N4million and above are struggling.”
“Some are even moving to cheaper accommodation. The ‘ideal and choice tenants’ that most landlords want to occupy their properties are currently defaulting because of the uncertainties in the economy,” he added, noting that the state of the economy was affecting their legitimate stream of income.
As a way out of the housing problem, Offiong Sam Ukpong, the institution’s chairman, called for local content in the building sector, urging government to encourage research into alternative building materials while implementing others that had been done in the sector by several bodies.
He faulted the importation of all manner of building materials into the country, noting that except the National Assembly passed the Petroleum Industry Bill (PIB), the manufacturing of building materials locally and the quest for mass housing with local substitutes might remain a mirage.
On the activities of quacks in the profession, Olurogba revealed that the institution had established a body to regulate the estate agency practice by training middle cadre professionals on the rudiments of the profession and ethics to bring them up to speed to maintain professionalism, explaining that they chose that course in order to protect the practice, the profession and the public from dupes.
Dotun Bamigbola, past Secretary of the institution, shared Olurogba’s views, disclosing that the institution had imputed standardisation in her practice by training the middle cadre professionals under the umbrella body of Association of Estate Agents of Nigeria (AEAN) in title documentation, agency transaction amongst others.
Moses Emele, the institution’s Publicity Secretary, says mass housing remains the only viable way to address the challenges of inadequate shelter and encouraged both the Federal and State governments to provide an enabling environment for the private sector by facilitating access to land.
“Government alone cannot provide everything but we expect them to provide an enabling environment for professionalism to thrive. We appeal to them to them to unbottle the bottle-necks on land acquisition, embark on site and serviced schemes and generally make land cheaper for the private sector to thrive”.
CHUKA UROKO
