Future of real estate in Abuja is very bright —Adebayo

Mr Festus Adebayo, is the Executive Director, Housing Development Advocacy  Network (HDAN) and the Lead Promoter of the popular African International Housing Show (AIHS). In this interview with DAYO AYEYEMI, he gives insights into the real estate industry in Abuja, predicting a major boom. He also gives reasons for the thousands of unoccupied houses in choice locations in the FCT while suggesting what the government should do to reduce the trend.

You have just been awarded the Honorary Member of the Nigerian Institute of Town Planners (NITP) during the just concluded 53 National Conference in Abuja. How do you feel about this?

I must acknowledge the gesture of the Nigerian Institute of Town Planners to have accepted me and inducted me as an honorary member. This is a call to service, a call to do more in the area of physical planning and urban development. We have been doing that but this membership will let us do more. I am going to leverage this membership to do more in the area of physical planning, in the area of urban development and in the area of affordable housing for Nigerians. This we will do more seriously and passionately than what we have been doing. I thank the executives of NITP for this. We want to assure that we are going to add value to their service.

What is the affordable housing situation in Abuja?

The situation of housing in Abuja is favourable to the rich but not favourable to the middle income and low income earners. I must tell you as a serious practitioner in this sector that, if you come to Abuja on Saturday and Sunday, you will understand more of what I am saying. The whole city is always deserted, but people live in the suburbs. The suburbs can also be categorised as we have the Lokogoma, which is near the city;  Zuba, which is out of the city; and  Bwari, where we have the Law School. Those who cannot afford to live in Zuba live in those areas – Bwari, One-man village and the rest. When you mentioned Karu, this location is still good for the middle income earners as it is not too far from the city.

What are you saying?

What we are saying is that, the people who really enjoy Abuja are those that have enough money. I mean the politicians, business men/women and those who are into corruption. These are the people that can buy those exorbitant houses in Abuja. We have plenty of houses which could have been of help but have remained unoccupied. The economist says the higher the supply the lower the price. The houses we are talking about that are empty are not the houses for those that really need houses. The people that need the houses are those looking for affordable houses; the houses between N6 million and N8 million and below. And when we talk about N8 million and below, how many civil servants can really afford this in the present economy? When they said they wanted to use the Federal Mortgage Bank, I could still remember that we have many cases with the mortgage bank where people were asked to pay 10 per cent, which is just N1 million and they could not  afford to get  N1 million to pay at once.

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These are the people that really need the government’s support. Even in the United Kingdom (UK), there is social housing – the Council Houses. We don’t have Council Houses here. Looking at the Federal Ministry of Work and Housing that has been executing the policy of the APC’s manifestoes, we cannot even be proud of 10,000 housing units. Even if we can be proud of 10, 000 houses, what about the prices when a  one-bedroom is going for N7.2 million. This also means that the affordability of these houses has to be put into consideration. When you talk about houses in the FCT, the people that owe them are the big boys. The people that have the pains are citizens below the ladder. You need to be at Mararaba, Mazuka Zuba and Kubwa and see the congestion. When you see congestion, you will see the relationship between congestion and crime. These are the areas with the highest level of crime. The unoccupied housing estates you are talking about are not in the level of those who can afford them. However, I still want to tell you that real estate is a goldmine for the newcomers in FCT. The future of real estate in the FCT is very bright. It is a place to invest.

Is it possible to tax owners of these properties for leaving them empty for so long a period – three, five years?

What we are saying is this, to avoid or reduce the number of empty houses, we should get a development company, an agency that is responsible for building approval, involved. What they are going to do is that at that point of applying for building approval, let it be documented or written that when this building is completed, there is a duration for completion and also a duration of the number of months that the houses can be without anybody living there. If you build the house within one year, certainly it must be occupied within two years. For now, the government can come out with sanctions. If this agreement can be entered into with the developers at the beginning of the project, I think the number of empty houses will reduce.

Are you saying the taxation of these properties will not work?

By the way, we have suggested property tax but we found out that they are not listening to us because those in position of implementing the law are the same people that the law will affect. So, they do not want to listen to us because they know they will be the victims of the law. We are now saying that from the point of seeking for building approval, development control should write it as a rule that when your building is completed, it cannot be left unoccupied for more than one year or six months. With that, within the six months, the fear of sanctions can compel them to lease/let out the houses. A lot of them are keeping the houses, calling the prices they know people cannot afford because they just want to use that to tie the money down.

The EFCC once said that real estate is a haven for money laundering. Don’t you see this as a dent to the sector?

It is a dent on the sector and that is why we are calling for the regulation of the industry. The sector must be regulated. If the sector is regulated, you cannot leave your house unoccupied after six or one year of completion.  Besides, for every real estate’s transaction you are doing, the information must go to  the Special Control Unit Against Money Laundering (SCUML), the agency of the EFCC that is responsible. I think if that step is properly taken, the dent you are talking about will be erased. All over the world people use real estate for money laundering. In abroad, the sector is regulated but in developing countries, it is not regulated. And to what extent can the law enforcement agencies like the  EFCC, police do?

You said that real estate is a goldmine in Abuja. Can you explain further?

Real estate is a goldmine here because this is the Federal Capital Territory. It is a place that attracts investments from people in the diaspora.  Everybody wants to have an investment or mansion/home in the capital of Nigeria. On that note, we can let you know that the future is bright. The gold in Abuja is the land, and that is why the government is getting more involved in the activities.

For the record, one of the highest crimes in the FCT is the real estate crime. You see a lot of criminals who are not real estate developers coming up with some shoddy housing estates and duping people of their hard-earned money for them to subscribe to their investments. So, Abuja is a goldmine for real estate. The future is bright. Abuja real estate sector is going to boom more. I mean, it  has more prospects than Lagos.

Tell us about the African International Housing Show?

It is a project we started about 16 years ago for the purpose of promoting affordable housing development. It is our own way of bringing people together across Africa to exchange ideas, to network and to showcase the latest housing projects, latest ideas, latest trends in the housing industry, among others. This, we have been doing very seriously and in 16 years we have featured nothing less than 10 ministers from different countries in Africa.  We have featured many governors, international speakers and  so many participants. On the average, we have recorded an average of 5,000 participants.  We have been bringing commissioners of housing for interactions and seeing how we can impact their capacity for affordable housing development, policy formulations and the rest.