The Federal Government on Tuesday charged property developers to reduce their rents and the value of properties in consideration of the economic hardship across the country.
According to the government, the values of properties and rents in other nations of the world are falling as a result of the global economic slowdown being experienced.
Speaking at the inauguration of board members of the Estate Surveyors and Valuers Registration Board of Nigeria in Abuja, the Minister of Power, Works and Housing, Babatunde Fashola, said many houses in Nigeria were empty while a lot of people lacked accommodation.
He said, “For me, I think the most important message I’ll like to share at this inauguration is to pose the question on whether the current land valuation system and values are consistent with the reality of our economy. You as experts must answer that question because we have a very challenging economy.
“Just recently, I checked the property markets in some other jurisdictions and because there is a global economic slowdown, what we see is that people are offering discounts in order to ensure optimum occupancy. But I’m not sure that the practice is the same here.
“So are these values consistent with the realities? Why are we not seeing rates, rents and values drop? Why are we having many houses unoccupied when people are looking for accommodation? The argument sometimes has been that properties are valued higher so that it can have impact on percentages and commissions.”
He told members of the board to work with the Federal Government in answering these questions, adding that they must consider the prevalent economic situation in the country in coming up with answers.
Fashola made it clear that as the board must work out ways of tackling the problem of high house rents and advance payments, particularly in major cities across the country.
The minister said, “Let me just ask you a question since everybody is here; is there nothing that we can do in this country about this practice of demanding rent for two, three years in advance from people who get their salaries monthly in arrears? Is there nothing that can be done, because we can’t continue like this?”
In his response, the Chairman, ESVARBON, Mr. Olayinka Sonaike, said the pressure on property developers from lenders with respect to the repayment of loans was one factor that often force developers to seek for advance rent payment.
Sonaike stated that if there were substantial mortgage loans from the Federal Mortgage Bank of Nigeria for developers, the situation would not be the same, while another member of the board called for a legislation that would mandate landlords to comply.
But Fashola insisted that property developers should come out with ingenious ways of tackling the situation, as he stressed that handling the issue was more than passing a law to that effect.
He said, “We must first of all question the practice, look at its strengths and weaknesses and its damage on the entire economy. For instance, as a minister, my salary is N900,000, so when you ask me to go and bring rent for two years in advance that I have not earned, and I actually bring it, shouldn’t you start worrying?
“So when you suddenly see that the price of water, food, etc., begin to spike, are we really gaining? Because one way or the other, I’m going to get back what you collected from me. It’s a matter of conscience. Can you pay for a taxi before you board it?”
Sonaike urged the minister to collaborate with ESVARBON, particularly in the construction of housing units in each state of the federation.