@ Cyberknight,

The thread has been quite informative with interesting view points.
As someone who own properties in the US, UK and Nigeria, I can tell you that there are varied and inherent
differences, challenges, and opportunities in the West and Nigeria. While the US, and the UK have very similar
mortgage systems, the property markets have some little differences, and comparing them to the Nigerian market
can be fraught with false assumptions for the would- be property investors.
There are major advantages and disadvantages of investing in the West Vs. Nigeria. Most of the points have been
extensively deliberated.
Back to the main issue of discussion.
What drives valuation and property prices: Only two things, and they remain simple economic forces of demand and supply.
That's the bottom line. That's true of the West and Nigeria, and of course, everywhere in the planet. We can debate what
contribute to the demand and supply, and how good governance can and should make a big difference by building verifiable and reliable
database infrastructure of lands, buildings and super- structures. The Abuja AGIS is already leading the way in this regard.

From my experience, I will prefer to invest more in Nigerian properties than the West because of one main reason: the capacity for growth.


I believe you thoroughly and soundly nailed the biggest issues with property market development in Nigeria in the bolded statements below.

Cyberknight: Mr Bugmenot,
I understand your point that an asset bought outright is less likely to give problems than one bought with credit. That is inherent in the nature of the credit system itself. However, my contention is that there is no place for such a comparison because the advantage in itself of having a credit system in place for the purchase of major assets far outweighs any disadvantages of the system and CANNOT in any way be compared to what obtains in the absence of a credit system. Most people given the option of owning an asset on to be paid over time or possibly NOT owning one at all (or late in life, or not what you'd want to own given a choice) would take the former option.

From reading your posts, I get the impression that you disapprove of the use of the way many people abuse the credit system in developed countries, usually by taking on excessive liabilities and especially w.r.t the financing of property purchases. Naturally, when credit is available, people who have no self-control or proper judgment shall most definitely fall prey to the lure of buy now and pay later. That is human nature. But the fact that there are so many apparent victims of the mortgage crisis does not mean that the system of mortgage financing itself is inherently defective.

I do agree with you that valuations are not likely to drop anytime soon in Nigeria. I also agree that the banks are not necessarily to blame for the absence of credit facilities for property acquisition in Nigeria; its a structural failure for which the government or what passes for it bears 100% of the blame. For a credit system to work, there must be a functioning judicial system to make it easy for lenders to recover their money, an easily consultable and modern land register where property transactions can be recorded and accessed and finally (but most importantly) lower interest rates.

Hi guys! Been offline for only a bit and yet Ive missed out on so much of the gist...
I have a pretty rough idea (corroborated by your posts) of how the real estate systems work in other countries and I acknowledge that each have their own pluses and minuses. But even if I don’t compare Nigeria to other countries, as a middleclass income earrner (btw 15-20M annual gross) shouldn’t I be given fair opportunity to decide whether I want to rent, buy my home outrightly or if I want to take a mortgage to do so?

Orgasticdance mentioned that there are only 4 megacities and 170+ million persons. So if we had more megacities would the pricing in each drop? Are you sure? Or would we just have a lot more cities that people can’t afford to have houses in?

Bugmenot recommended taking up properties in the distant outskirts where the prices are lower. No problem. How many hours will I spend commuting daily? How much additional expense on transport? Vehicle maintenance? Can we put a tag on exposure to the risk of road traffic accidents or violent crime(which increase exponentially with time spent out on the road)? But all that is not life! Meanwhile, on the other end of the spectrum, what about all the fancy estates developed in the so called choice areas? Aren’t they supposed to be for people like me? Or have you not noticed that a good number of them are actually empty? What becomes of these buildings? My point is that something must be deeply wrong for those properties to have been valued at such high prices.

As for taxes… be it property tax or whichever, many of us well meaning Nigerians can’t even afford to acquire the property first, before beginning to frown at the tax thereafter. As for me, I wouldn’t mind paying… after all, to this date I still haven’t been able to figure out what happens to all the tax that has been deducted from all my payslips since I started earning salary. So what else is new?

The essence of my post is to seek answers to a burning question: How successful do I have to be to afford the basic necessities of life which our local environment has made out to look like comforts? The regular power supply, good road access, pleasant landscaping including adequate storm draining, standard healthcare, good quality schools etc.

Is there a a ‘Nigerian Dream’? Am I entitled to it? Has the Nigerian system failed me (yet again) or are my expectations (esp. on real estate matters) unrealistic?

I know that none of you good folks can wave a wand and make all this wahala go away, but I'm getting very strong points and thought-out responses from highly intelligent posters who, like me, are not cool with the status quo. And aside from rekindling my hope, it takes the pain away, even if only for a little while.

.

Underdogg: Hi guys! Been offline for only a bit and yet Ive missed out on so much of the gist...
I have a pretty rough idea (corroborated by your posts) of how the real estate systems work in other countries and I acknowledge that each have their own pluses and minuses. But even if I don’t compare Nigeria to other countries, as a middleclass income earrner (btw 15-20M annual gross) shouldn’t I be given fair opportunity to decide whether I want to rent

Guy, that income you quoted na upper middle class by Nigerian standards o.

Cyberknight:

Guy, that income you quoted na upper middle class by Nigerian standards o.

Ouch... doesnt that make this whole phenomenon all the more frustrating?

THE INFLUENCE OF LOCATION ON PROPERTY VALUES IN ONITSHA URBAN
http://www.bravoprojecthelp.com/estate-management/influence-location-property-values-onitsha-urban-anambra-state/

THE INFLUENCE OF LOCATION ON PROPERTY VALUES IN ONITSHA URBAN
http://www.bravoprojecthelp.com/estate-management/influence-location-property-values-onitsha-urban-anambra-state/