Home seekers in Nigeria have been urged to brace for imminent rise in cost of houses in the country.The advice is coming following increase in prices of building materials due to the implementation of 7.5 per cent Value Added Tax (VAT).
Raising the concern in an interview with New Telegraph in Lagos, Deputy President, Real Estate Developers Association of Nigeria (REDAN), Mr. Akintoye Adeoye, said that rising prices of building materials would definitely lead to rise in the cost of building houses as well as rent.
Some of the building materials, he said, included cement, floor and wall tiles, aluminium, roofing sheet and reinforcement.
Currently, a 50-kilogramme bag of cement is selling for N2,650; sandcrete block – N240.00; aluminuim – N3,500; roofing sheet (5mm)- N3,360 and reinforcement (10mm)- N220,000.
Adeoye said the general inflation would also affect the cost of renovating existing buildings by landlords and developers.
He said: “The costs of building materials, houses and rent will go up; so, home seekers should brace for this.
“It would have been better if government ensured compliance with VAT at five per cent rather than increasing it. Government should have captured more people.”
Managing Director, Assured Construction Company Limited, Adewunmi Okupe, said the cost would go up naturally as it will be passed to buyers or tenants.
He described VAT as “an indirect tax collected from someone other than the person who actually bears the cost of the tax.”
Okupe said that no matter what, house sellers would pass the additional cost to buyers.
“Sellers may also suffer with time because buyers will buy less. And turnover of seller can dwindle,” he said.
Developer of H.O.B Estate Limited, Chief Olusegun Bamgbade, said it was better to increase VAT than fuel price.
Intellectual Property Valuation expert, Lekan Akinwunmi, said the issue had resulted to a chain event, explaining that it will reduce purchasing power, adding that people should apply scale of preference when buying anything.
Another affordable housing advocate, John-Bede Anthonio, said that prices of building materials had gone up by 20 per cent.
“Nigerian will become poorer and poorer and there will be inflation,” he said.
According to him, government needs to reduce cost of governance and ensure better utilization of scarce resources.
“The country is busting as evidenced by drug smugglers, yahoo yahoo and other Nigerians being arrested all over the world.
“Only 30 million people are supporting the unproductive population of 2020 million. It can’t last long before a partial collapse of the economy,” he said
SOURCE: NEW TELEGRAPH
