Land fees hike turns Abuja into billionaire’s abode

Premium for land in the Central Business District (CBD), Area of Abuja, was jerked up to N20, 000 per square metre from N2, 000, the rate formerly paid in respect of all landed property in the city.

By implication, the value of an average plot of land in the central area of Abuja, say for a 1,000 m2, which hitherto would have cost N2,000, 000, now has a price tag of N20,000,000, and this is just the cost of land.

First time visitors to Abuja are usually impressed by the number of construction projects, which should mean cheap property prices and the almost unimaginable prices of existing pieces of property. It seems the prices of property always go up when a new building is constructed. Observers of this trend say this is a reverse development to what obtains in other countries. In other countries, prices will usually crash when more buildings go up.

Agents of different hues and even scammers have also featured while the speculative prices of land encouraged forgeries of documents.

For example, Abuja Homes which cost N16m in 2007 are now being sold for N50m in 2009.People who live in other cities are bewildered when they learn of what property costs here. Right now at Gwarinpa, a choice two bedroom flat will cost between N 750,000 and N1 million per annum as rent.

At Jabi district where there are many on-going office and residential constructions, it is almost illogical that the prices keep going up. An average plot of land in Jabi district before the increase, was sold for between N40 and N50 million and in high brow areas, plots were sold for N200 million and above.

Even in the satellite towns like Kubwa and Lugbe which are traditionally regarded as refuge places for many who cannot afford expensive rents, are not being left out from the scourge of abnormal increase of rent. There was a case of a family who had to relocate to Bwari because their mini-flat of N140,000 at Dutse suddenly skyrocketed to N250,000 by the next rent payment.

Land fees in highbrow areas with full infrastructure, which include Asokoro, Maitama and Wuse II, have now gone up from N2, 000 to N18, 000 per square metre.

Similarly, premium for land in Garki I & II, Wuse I and Jabi, which also has full infrastructure, is now N15,000 per square meter, while land in Katampe extension, Gudu, Mabushi, Durumi and Gwarinpa will attract N12, 000 per square metre.

Application fees for both residential and commercial land in the FCT has also been reviewed upwards from N50, 000 to N100, 000.

Ground rents have also been increased from N25 to N40 per square metre in Asokoro, Maitama and Wuse II Districts, from N15 to N30 per square metre in Katampe extension, Gudu, Mabushi, Durumi, Jabi and Gwarinpa districts while Dape, Daki Biyu, Kado and Mpape districts attract N15 per square meter, up from N10.

Part II, Section 5, subsection d of the Land Use Act of 1978, empowers the Governor, in the case of FCT, the Minister,” in respect of land, whether or not in an urban area, to revise the rental fees at such intervals as may be specified in the certificate of occupancy.”

Across the metropolis, especially in places like Wuse 2, Maitama and Asokoro, the rent for houses has almost doubled over the past one year.

Wuse II, which is regarded as the heart of the town, is said to be the most sought-after residential area in Abuja. Because of its centrality, it is where you have most banks, markets, big supermarkets and places of entertainment. It is also close to the Central Area, where many people work.

Maitama and Asokoro are very expensive and quiet. Most big shots in Abuja live in these areas, so the prices are very high. In Maitama, rent for a two-bedroom flat goes for between N850,000 and N900,000 per annum.

With the new increase in land charges, many residents wonder what they will have to cough out by the time shylock landlords begin to demand even higher rents in order to recoup what they have paid to the FCT Administration.

Land in all FCT Area Councils are however not affected by the review. Therefore, to beat the exorbitant price, many civil servants have resolve to live in neighbouring towns such as Mararaba, Masaka, Suleja and other satellite towns like Lugbe, Kubwa, Dei-Dei and Dutse; from where they commute work everyday.

Umar Shuaibu who lives in Suleja, said he lives there because his salary cannot sustain him in the city proper. “The houses in town are too expensive and I cannot afford it,” he said. “But in Suleja, I pay N80,000 per annum for a self-contained room. A two-bedroom flat in the area goes for about N150,000 and N200,000 per annum.”

It also poses a challenge for those who live in these towns and work in the Central District Area. Mr. Shuaibu also said, “I leave my house at 5.30 am and resume at 7.30 or 8am. Well, sometimes I get late to work because of the traffic.”

Aliyu Garba who is also a civil servant, said he moved to Mararaba because houses in town are very expensive. “My salary is not enough for me to rent even one room in town,” he said. “In Mararaba, I pay N60, 000 for a room. The same room in town goes for N200,000 to N300,000 per annum.”

Austin Emelue, another resident of the suburb, said it is also worth mentioning that most people who migrated from some northern states because of religious or social crisis usually move into the towns and other towns bordering the FCT. They too have contributed to congesting the satellite towns.

It was only a matter of time before the rent in these areas would rise to market levels.

Mararaba is already betraying signs of this. “It now takes N150,000 to N200,000 to rent a room and parlour in Mararaba, as against the former N100,000 to N120,000,” Mr. Emelue said. The place is now becoming very congested because of the influx of people from the town and those whose property were also demolished in parts of Abuja.”

Two years ago, a two-bedroom flat cost N200, 000 a year in Lugbe. But now, it goes for N400, 000. In Gwarinpa, a two-bedroom flat that was formerly let for N250, 000 now goes for about N400,000 to N500,000.

The same trend is noticed in Dutse and Kubwa. These are cheap pickings, though. Residents of Abuja pay a lot more.

In the Garki part of town, “a one-storey duplex in Area 11 will go for N2million a year,” says David, an estate agent. At Prince and Princess estate, a one-bedroom flat goes for N450, 000; while a duplex with boys’ quarters goes for N1,200,000. Within the Games Village, a one-bedroom flat goes for N500, 000.

An Estate Valuer, Shehu Liman of S.D. Ventures, said that the cost of houses in these areas have continued to rise by the year and presently, the percentage of increase has gone up to 150%.

“Before the demolition, you could get a 2-bedroom flat at Wuse for N450, 000. But now, the same goes for N1million and you will have to pay for two years.”

In Maitama, the same used to go for N500,000 to N600,000. You now have to cough out N900-N1 million. Uduak Obong who works with a real estate firm and doubles as a house agent said landlords usually increase the price of their rent “because of the high demand.”

He attributed the hike in cost of accommodation to the increase in price of land in the metropolis. He said a plot of land in Wuse 2 sells for about N100-700 million and it takes a lot to build. “With the recent hike in land charges, surely the values will rise commensurate with the one done by the FCT Administration. How then will lanlords give it out cheaply?” he asked.

Mr. Badmus, however, blamed the government for the hike. “The rate of road construction is more than that of houses,” he said. “No lands have been acquired by estates since el-Rufai’s tenure and the ones people are building on now were the ones they were given then. When there is a surplus of land, the prices of houses will reduce.”

Aaron Muttang, an estate surveyor and valuer and a business development manager in a space management company, said it was logical that prices of property be tied to the force of demand and supply. He reasoned that as the population of Abuja increased every day, it would be difficult to match the growing population with existing property. He said, “the only way to tame growing property prices is for the government to build large residential schemes like Gwarimpa. If there are two or three of such schemes, prices will crash.”

However, when it comes to price appreciation, real estate in Nigeria is pretty crazy but logically demand outweighs supply heavily and most people are very keen to have their own property. Those wishing to buy or rent property in Abuja should therefore brace up to spend more money or else, leave the capital city.