With areas that were once affordable now out of reach, low-income renters are being forced to outskirts and suburbs in major cities of the country.
The dwindling number of residential accommodation owing to their conversion to commercial uses is also putting pressure on homeowners to increase rents. The increases are exacerbating the high rate of relocation by low and middle-income earners to urban centres, especially in Lagos, Abuja, Port Harcourt and Kano.
While rising rents are largely a byproduct of limited supply and high demand across the rental market, high inflation due to the poor economy, unfriendly policy and inadequate employment have stifled productivity, as well as eroding the earning power and income of most Nigerians.
The yearly inflation rate in Nigeria accelerated to 21.82 per cent in January, this year, the highest since September 2005 from 21.34 per cent in the previous month, against market expectations of a further slowdown to 21.3 per cent. Soaring food prices and weaker currency were the main drivers.
With many workers living in city centres for accessibility to companies and government’s offices where they work, urban locations tend to have a higher demand for rental units. The Guardian gathered that this has driven up prices in recent times.
Urban locations have become centres for higher costs of living, higher property taxes, building materials and utility costs, which make it more difficult for landlords to offer affordable rents. Cost of building materials such as cement, reinforcements, finishing, paint, and others, have also risen by over 150 per cent in recent years.
Worried by the development, young, mobile professional renters and apartment-dwellers, who often live in costly accommodation within highbrow areas such as Ikeja, Ikoyi, Lekki, Victoria Island, Gwarinpa and Asokoro are changing their perception to settle in suburbs.
According to experts, many of those living in the city centres of Kubwa, Jabi, Wuse and Utako districts in the Federal Capital Territory (FCT), Abuja, have relocated 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.
Suburbs are typically been viewed as cheaper alternatives to city living. The Guardian survey indicates that rental costs within the city climbed faster than in the suburbs. For instance, average rent per square foot in the suburbs was about 30 per cent cheaper than in urban areas. These cheaper living options are part of reasons many Nigerians are moving to the outskirts.
Property developers are taking advantage of the situation by acquiring large expanses of land and launching new housing schemes in the suburbs such as Arepo, lkorodu, Mowe, Ibafo, Abule Egba, Lafuwape in Ogun State, Kubwa, Karo in Abuja and other locations.
The Guardian survey shows that in Abuja city centres, two-bedroom ranges from N2 million to N3 million, if the building is in a good state. Locations such as Karu and Kubwa and neighbourhoods of Niger, rents range from N600 to N1 million per year.
Findings revealed that the median cost of renting a two-bedroom apartment in the city areas has hit a new high of N850, 000 to N1 million per year, while a one-bedroom can be as high as N500, 000 or N600, 000 per year for well furnished apartments.
A two-bedroom flat, which is often in high demand in the outskirts, now cost between N400, 000 and N650, 000 per year for a moderately furnished apartment.
Speaking with The Guardian, a tenant in Ojodu-Berger, Lagos, Sunday Ojo, who relocated to Mowe recently, said moving 65 miles out of the city has helped his family to save between 45 to 60 per cent cost of rent.
He noted that the cost for his two-bedroom apartment in the previous location was N800, 000. However, the same unit cost about N350, 000 per year in his new location.
Another tenant, who resides in Ajao Estate, Ikenna Maduka, said he decided to relocate to Ibafo, having lived three years in the area, paying rent of about N850, 000. He said it became difficult to renew payment due to the economic crunch.
“I couldn’t sustain the rent. When my friend told me that I could get a two-bedroom within the range of N120 to N150, 000 in lbafo, I had to move. Many of my friends have also joined us in the area. I can count over 10 friends and associates that relocated to the area in the last one year. Some were able to get a self-contained apartment for N60, 000 or N50, 000. The only challenge in the area is poor road infrastructure and traffic. If there is no traffic within 40 to 45 minutes, I can connect Oshodi from Ibafo,” Maduka said.
Expounding on the development, the Chairman, Faculty of Estate Agency and Marketing of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr. Kayode Ogunji, said there is surge in movement to city’s outskirts as most Nigerians have discovered that it is cheaper to have a good accommodation outside the city’s metropolis.
He said a two bedroom in Yaba area of Lagos, is now about N1. 5/N1.2 million, whereas the same type of two-bedroom with all rooms en-suite and well finished in locations lkorodu or Arepo, still go for about N500, 000/N700, 000 per year, depending on the location, infrastructure and furnishing of the property.
Ogunji observed that bungalows in the past 10 years in Yaba and Ebute Metta area hovered between N15 million and N20 million, but has now gone up to N120 million and N150 million.
“ Some families now look at the situation, saying, if we sell our property, we can still move out, get something better and still have some money in my pocket. In some cases, the original allottees are no longer alive, their grandchildren sell and share the money and move out.”
According to him, all over the world, there are some areas called blight locations, because it will get to a stage in life when once trending building designs become obsolete as a result of modern designs overtaking them.
He said: “ In those old buildings, for example, if you go to Ebute Metta, the original building designs are gone, particularly, in Adeniran Ogunsanya and Bode Thomas, Surulere. You can count the original designs in those locations, but they have been redeveloped into shopping malls or block of flats or office space.
“Surulere, in time past, used to be called the ‘dormitory zone’, because people wake up from there to go and work in Victoria Island and lkeja. But now, the centre of activity is back there. During the day, offices surround people living in Bode Thomas and Adeniran Ogunsanya Streets, but at night, it is like a ghost city.
“If you are still living in these areas, during the day, you won’t enjoy it because of the traffic and at night you are lonely. That is why peopleare beginning to move out of those areas.”
He, explained that a concept called ‘hovering value’ in the property market became applicable in some areas like the Lagos/lbadan Expressway, particularly Mowe and Ibafo, which were separate entities. He added that currently, it is difficult to distinguish between the two locations as development has set in the locations along the highway.
“About six years ago, a two bedroom in Ibafo was around N130 or N160, 000 per year but you can’t get it at that rate now, because there is pressure on demand. The settlements are coming together and as a result of that, people who used to live in Surulere in those days, who have become choked up by offices and irregularities of essential facilities, moving out. This is equally are beginning to affect Ebute-Metta as property value in the area now is settling down. Commercial and residential developments are coming up highly in Ebute Metta.“
He, however, noted that a major factor affecting those relocating to the suburbs is the dearth of communication infrastructure in those locations.
“If there is good communication, people can live anywhere. Also if there is good railway service from Mowe, Imota or central Lagos, which is regular, people will love to live where there is fresh air,” he said.
In view of the mass accommodation demand in suburbs, he said rent prices have started to go up in those locations, as the market is controlled by the demand and supply.
“Building is not something you can produce overnight, it takes time before you finish the construction and the cost of construction today is high. At least 50 to 70 per cent of residential properties being developed are through personal money and not from loan and long-term mortgage. That is why it takes longer time for property to get to the market. For instance, with about 25 million people in Lagos, how many properties are coming to the market?. People will not sleep under the bridge. The competition now is based on survival of the fittest. Regrettably, if you can’t pay the money, you have to go to Arepo or lkorodu and live the city for moneybags. “
Another estate surveyor and valuer, Emmanuel Alao, said the massive shift towards outskirt living is not unconnected with the economic policy of government, which has incapacitated most Nigerians who live in the city centres as their sources of income keep dwindling.
He said: “What also contributes to the development is the fact that some renters look at urban centres as being too crowded, hence, limiting ease of movement. Probably, in cases, where offices relocated to permanent sites to , you will see urban-rural shift instead of rural-urban drift.”
For instance, when the Joint Admissions Matriculation Board (JAMB) office in Abuja was in the town, most of the people working with JAMB live within the surroundings whether their income could cope or not. But when JAMB relocated to its permanent site in Bwari, some staff had no choice but to relocate to Bwari. Same thing happened when we had the Meteorological Centre within the city.
“Also when the Nigeria Security and Civil Defence Corps (NSCDC) headquarters in Zone Five was moved to Airport Road in Abuja, those who are staff there also moved. These are rare cases but the most important thing in the last three years is that the relocation of people to suburbs is due to economic pressure,” he said.
He further explained that the economic pressure is reflected through increase in building and construction materials prices impacting rents, while income is not commensurate with the increase.
