I was discussing with real estate agent recently about why there were so many unoccupied houses in lekki and in some parts of Lagos Island. His answer was that the landlords were unwilling to let down on the rent price and would rather have the houses unoccupied than occupied for a rental amount considered too small.
Curiously I wondered who is loosing in that regard as an owner of an unoccupied building
surely must be finding hard to repay the cost of construction. At the moment of asking the reason became mutually obvious. These guys have no cost of borrowing. Neither do they face any form of loss of value on their property. It was a win win situation for them. The funds were simply unlevered and unencumbered. It was corruption money. Money belonging to the people of Nigeria basically ‘housed’ in grandiose properties all over Lagos and indeed Nigeria.
It’s no wonder house rents never seem to go down. It’s probably how some of our parents also built those mansions in the village that can’t ever be monetized as no one ever lived in them all year long.
So that explains it. The sad truth is that most of the housing units in Nigeria are funded from corruption money. Money looted from both the public and private sector at a pandemic level.
As Lagosians bask in the euphoria of the new Tenancy law, be reminded it is just a short term respite, till housing become low cost and funded via mortgage, it will continue to be a shelter for looted funds.
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