Recession: Sales of luxury apartments drop

The sale of luxury properties across the country has dropped significantly, stakeholders in the housing sector have said.

Real estate developers said most brokers, who used to sell as much as 10 high-end buildings in one year, ranging from N100m upwards, could hardly sell one presently.

The National General Secretary of the Real Estate Developers Association of Nigeria, Mr. Akintoye Adeoye, said the stock of unoccupied luxury apartments in Lagos, Abuja and Port Harcourt had risen significantly in the last few months.

According to him, only the sale of regular houses with mortgages has been fairly consistent among first- time home buyers.

He said, “The sale of property within N5m to N25m bracket where people can still get mortgages or where developers have to come up with plans that include paying gradually are not doing badly, they still sell but the sale of high-end properties has been very slow since the onset of the economic downturn.

“People are more careful about how they spend money now and even those who have the money are not willing to spend it. Unlike before when one person can buy about 10 luxury houses and keep the keys.

“Most of the people who buy houses now are first-time buyers who have no means to buy luxury apartments. Of course, there are some who still buy up to N45m worth of homes with mortgage but they are mostly those who work with blue-chip companies.”

Adeoye added that the situation had forced developers to reduce the prices of such apartments to woo buyers.

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“But even with the drop in prices, people are not interested. There are some developers that can’t even sell one in a whole year because there is no mortgage for this group of properties. Those who buy them get money from other sources but those sources are no longer available,” he said.

The Principal Partner, Bode Adediji Partnership, Mr. Bode Adediji, said apart from the economic downturn, some of the reasons for the drop in sales were oversupply and insecurity especially for expatriates who were mostly the target for such buildings.

Adediji, who is also a former President of the Nigerian Institution of Estate Surveyors and Valuers, said, “There is no doubt that the recession is particularly evident in the housing sector especially the luxury apartment end.

“The reasons for it are understandable; there is oversupply and the employment regime where employers bring in people from abroad and put them in luxury apartments has been phased out. They rather put them in a hotel and when they are through with their job, they leave. They also don’t bring their family because of security issues.”

An estate surveyor and valuer, and former President of NIESV, Mr. Emeka Eleh, said take up of luxury apartments, particularly in Ikoyi where there are several unoccupied buildings, had dropped significantly in recent times.

“The real estate market is a representation of the overall economy; if the economy is not doing well, the sector won’t do well,” he said.