Nigerians now prefer to invest in foreign properties

Mr. Godwin Alenkhe, Chairman of the Estate, Rent and Commission Agents Association of Nigeria, Lagos state chapter has expressed that the high cost of land transactions is having a negative impact on the real estate sector as Nigerians now invest in foreign properties. He said this in an interview with MAUREEN IHUA-MADUENYI of PUNCH news.

When asked how the devaluation of the naira has impacted real estate agency, he said it has really affected response from clients. In his words, “To them, it is now better to invest in foreign properties than here in the country. Most people are now buying real estate overseas instead of bringing down the money here because they don’t really know the value that the money can get for them”

“To us, we have seen a reduction in the level of patronage because people are diverting funds overseas, even to West Coast countries such as Ghana, Togo and Benin Republic. They prefer going to such places than investing here in Nigeria and it’s really affecting us.”

“The whole thing actually started about two years ago, long before the devaluation of the naira. People found it more lucrative to invest outside because of the cost of perfection of documents. In our neighbouring countries, you don’t go through those hurdles where you have to pay multiple taxes. You have to pay to the Federal Government, the state and local governments on just one property. So, when they realise that the money can’t get them what they want here in the country, they take it overseas where they are sure that they will not experience these problems in real estate transactions.”

He further spoke on how reduced the charges for land transactions in Lagos has impacted on his business.

According to him, “The damage has been done a long time ago. It is like something that is too late to rectify. The only thing that can improve the situation and bring back the peak period is when the naira appreciates and the different arms of government develop a singular policy on property documentation in the country. Not when you will be paying land charges to the state government and the federal will come and later the local government will also come to get their share.”

“And within the same locality, you also have the local government revenue that has to do with land. The damage has already been done; it is only when we have a singular policy, for instance, fixed amounts for specific transactions and not paying to different tiers of government in the name of revenue.”

He also had this to say about the reason why some estate agents still charge two year’s agency fee and commission, while landlords are made to accept one year’s rent, despite the state government’s tenancy law.

“The truth is that we have tried to enlighten most of our clients that it is better to always patronise government licensed estate agents who are simply regarded as the service providers in the housing sector. Most people taking two years agency fee and commission are doing illegal business.”

“A couple of months ago, the service providers in Lagos entered into an agreement that we should take one year rent, agency fee and commission. And that the rate should be 10 per cent agency fee the one year rent.”

“If, for instance, people are having that kind of problem, they should channel their complaints to the appropriate quarters such as the Lagos State Real Estate Transaction Department and associations like ERCAAN are also there to help such people. If it is our member, we have ways of dealing with the compliant and if the agent is not our member, we will report him to the Lagos State Government.”