Politicians selling properties to raise campaign funds- Investigation

2011-02-09
THE PUNCH Newspaper

Life is gradually returning to the Nigerian real estate market after a two-year lull, thanks to some politicians, who have reignited passion in property transactions as a result of the forthcoming elections.



However, unlike in the past when well-oiled politicians and political office holders would buy up any available choice property on offer in apparent display of wealth, real estate players have said a lot of them are putting some of their real assets up for sale in order to raise enough money for electioneering.



Our correspondent gathered that there had been an increase in the number of briefs received by estate agents from politicians to sell off some choice properties.



Some operators, who spoke in separate interviews with our correspondent on Tuesday, said forced sales of properties by politicians in preparation for the elections and foreclosures were the major drivers of the recent upsurge in property sales.



A foreclosure takes place when a homeowner or property owner cannot pay the mortgage fees on the property and is forced to give it up in order to pay back what is owed.



The Managing Director, Nice Dreams Properties Limited, Mr. Richard Uwagie, said some politicians had contacted his firm to sell off their properties. He, however, added that the houses and plots of land being offered for sale were high-end properties, whose demand had “dropped significantly.”



He said, “Between now and April, politicians will try to rake in lots of money for their campaigns. Some of them have contacted us to sell off some properties to enable them to raise money immediately. However, we have not been able to sell any yet, but we have offers to sell. So, we are waiting for buyers. They will sell now to raise funds for their campaigns and buy other properties when they get back on their feet after the elections.”



He said the number of briefs his company had received as a result of the preparations for the April elections had increased by about 20 per cent.



The Managing Partner of the Ikoyi-based Livingstone Properties Limited, Mr. Isaac Awofadeju, also said the values of properties were currently falling due to the upsurge in the number of properties put in the market for sale by politicians.



He said, “We have more properties that we are selling now than before, with our property portfolio increasing by about 20 per cent. We have received a number of briefs from politicians.



“We could not sell some of the properties but other firms could sell them. Many of such properties are already in the market and more are coming up between now and April when the elections will hold.”



Experts said the development would be part of the driving forces for the property market, which Alonge said would have “patchy, but slow and steady recovery in prices from the third quarter of the year.”



He said, “Demand will remain subdued due to the credit squeeze in the economy and as a result of rising unemployment in the land; but there will be selective opportunistic demand for mortgages. The ability to foreclose successfully will also affect mortgages.”



The Executive Director, Aso Savings and Loans, Mr. Peter Alonge, told our correspondent in an interview on Tuesday, “The property market will witness increased supply due to forced sales in preparation for the elections and as a result of foreclosures.



“It is difficult to say that the sale of houses by politicians is the driver of the market, but certainly, it is one of the present realities in the market as at now.”



It was also learnt that a lot of Nigerians, who took mortgage loans from the banks to acquire properties during the boom period, were now finding it increasingly difficult to meet up with their repayment schedules.



According to findings, this is due largely to the exorbitant interest rates of between 18 and 22 per cent that they had to pay on the loans annually and job losses that followed the banking industry reforms.

 

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