Despite the Ebonyi government’s increasing investments in infrastructure, the state’s real estate market has tanked as a result of hefty property taxes. Real estate practitioners claimed that the taxes have reduced the supply of houses and hampered the property market’s growth, which has been just five to ten percent over the past five years. The source discovered that many taxes have led to investor apathy, particularly in the residential and commercial sectors, since the costs of doing business have increased and some businesses have been compelled to relocate to other states as a result of the taxes.
With inflation, rising interest rates, higher building material costs, a shortage of trained artisans, insufficient long-term funding, and inconsistent government policies that affect the real estate market, the Nigerian economy has continued to face difficult times. Taxes have discouraged investment in the real estate market, which have resulted in increasing prices for both new homes and rentals in urban areas. The demand for residential units has increased significantly in the real estate market, but new project construction has decreased significantly.
A two-bedroom bungalow is set to amount to N8 million.
According to statistics, a two-bedroom home listed for sale costs N8 million, while a three-bedroom bungalow costs roughly N11 million. Depending on the amount of land space, three-bedroom duplexes and four-bedroom homes cost N30 million and N40 million, respectively. In the rental market, one-bedroom apartments and terraces are rare, while two-bedroom apartments cost between N180,000 and N240,000, three-bedroom apartments cost between N350,000 and N500,00, and duplexes cost between N600,000 and N1.5million. Until date, the costs have been as follows: duplexes cost between N250,000 and N450,000; one-bedroom apartments cost between N100,000 and N120,000; two-bedroom flats cost between N130,000 and N150,000; three-bedroom flats cost between N180,000 and N200,000.
Multiple taxes, according to industry experts, have threatened property development, consulting, and administration and necessitated immediate action since they are limiting investment in the area and suffocating industry participants. According to Henry Odigwe, Chairman of the NIESV’s Ebonyi State branch, the government has been indirectly limiting the growth of the real estate industry, which is why it is not expanding like it is in other large cities. Many people’s properties have been forcibly taken by the government, with very little (much less than their worth) or no recompense offered.
Residential real estate in higher demand than commercial buildings.
Despite the circumstances, some developers continue to build, however the rental and capital values of properties are relatively low when compared to other states. In the state, demand for residential real estate is higher than that for commercial buildings, just as demand for apartments is higher than that for commercial premises. The majority of potential investors’ judgments, according to Mrs. Anthonia Akani, a former chairman of the NIESV’s Ebonyi State section, are influenced by the community Attorneys. Prospective real estate investors are put off by the situation in which if you want to develop or even make basic repairs to your property, you will be required to pay absurd amounts under the guise of a community development fee or whatever name they gave it, she said.
She believes that there is a lot of opportunity for real estate investors in the suburbs. A number of the regions, including Obubura, Nwaezenyi, Azuebonyi, Iboko, and portions of Ezza, Ikwo, Agbaja, and Nwofe Down Ogbaga Road, have not yet been fully developed. Real estate investors might consider these places with good road networks. She claimed that the majority of the state’s or city’s land is still not registered, making it difficult to conveniently do title searches on them.
The government should create an atmosphere favorable for investors.
Given the importance of land title registration for all real estate investors, she advocated for the government to create an atmosphere that is favorable to investors. Austin Otegbelu, a professor of estate management and environmental valuation at the University of Lagos, claimed that the major cities of Abakaliki and Afikpo lack a solid economic foundation that would fuel the real estate market. He added that insufficient compensation for seized land cannot elevate the people out of poverty but rather impoverishes them. He claimed that a strong economic base would stimulate effective demand and improve the real estate market. He believed that the tax code should also be friendly to both investors and citizens. To draw in investment, the government should be prepared to contribute its own equity.