Following flooding of residential and commercial property in several states, experts have predicted up to five to 10 per cent drop in demand and property value in affected areas.
There are also concerns that property owners, who are victims of flooding will see a rise in home insurance premiums and increase in maintenance of houses in flooded towns and villages, particularly in 18 states of the country.
Nigeria’ s cities are battling the worst flood impact in a decade with over 500 people killed in 2022. Authorities blamed the floods on water overflowing from local rivers, unusual rainfalls and the release of excess water from Lagdo dam in neighbouring Cameroon’s northern region.
The National Emergency Management Agency (NEMA) confirmed that as of October 9, 2022, water levels at Lokoja and Makurdi along Rivers Niger and Benue was 11 per cent above the level recorded in 2012.
So far, the flood has wreaked havoc in 31 states of the federation and the Federal Capital Territory (FCT). Over 500 persons are reported dead; 1,411,051 affected; 790,254 displaced persons with 1,546 persons injured.
No fewer than 44,099 houses are partially damaged; 45,249 houses totally damaged; 76,168 hectares of farmland partially damaged and 70,566 hectares of farmland are completely destroyed by the flood.
The 18 states heavily affected are Abia, Anambra, Kano, Imo, Kogi, Plateau, Taraba, Yobe, Edo, Jigawa, Bayelsa, Adamawa, Kebbi, Benue, Niger, Borno, Delta, Enugu and Ebonyi states. Many homes are also submerged, lives and farmland lost in specific locations like Kogi, which recorded the highest impact as properties worth billions of naira were destroyed.
Experts warned that without strong mitigation measures, flood from extreme torrential rainfalls will continue to present a major threat to the survival of the property markets.
They expressed concerns that the development could trigger a higher demand in residential real estate and a gloomy situation for owners/occupiers, developers, and practitioners as affected residential locations and lands may be deserted for a long time.
A 2009 Royal Institute of Chartered Surveyors (RICS) report states that flooding can negatively affect a property’s value, with the impact ranging from negligible to severe (circa 30 per cent), however, value usually recovered three years post flood.
There are clearly a wide range of factors involved, such as the severity and depth of flooding, risk, ability to defend the property and location. “The benefits of living on a floodplain have often been seen to counterbalance or outweigh the drawbacks of a potential flood, however, as flood risk increases with climate change, this balance may be altered,” the report added.
The Guardian found out that property value in flood prone locations have dropped up to about 10 per cent, while locations within a floodplain significantly reduce the property value relative to similar flood-secure housing in the same area.
Expounding on the development, the Chairman, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Kogi State Chapter, Apeh Phillips, told The Guardian that many properties were swallowed up and areas affected are enormous.
Phillips said the effect of the flood on property sale is high because many people that acquire lands where the floods have taken over now lack confidence to go back to the areas affected to develop any longer.
“Even when the flood goes away, the rental value will be very low because no one wants to go and stay in a place where after one year, you will be thinking of where to pack to again. If you are speculating, there’s no how, people that have seen the situation will not display lack of confidence to pay even one naira again? When you have properties to sell to move away from flooded areas, you find it difficult to get a buyer, “ he said.
He explained that when the flood goes away, the foundation of the structures in the affected communities will become weak and the buildings may start to collapse one after another.
“The flood weakens the foundation of the buildings, and defacing them. Some of the access roads like the Federal road from Lokoja to Enugu were taken over by the flood. People that were cut off were using boats and ferries to cross to the other side of the town. It was not easy for them because some of the people that maneuver the boats and ferry do not know where buildings were, and so collide into the buildings and many of the people trying to escape were drowned.”
“Some of the highly affected areas are Alagbolo new layout, Gadumo settlement, Ganaja area, Natako, Bada-around the Airforce Base, and the water works area in Lokoja. What makes the situation so devastating is that the two Rivers meet in Lokoja, River Niger and Benue.
“There are other channels and canals distributing water and when they are flooded, they become dangerous pushing the water out and the flood begins to affect people’s property. There is no potable water for people in the town to drink except those that have boreholes,” he said.
Philips said the flooding situation in the state is more of a Federal government matter as the state has no control and resources to savage the situation, hence, the Federal government should intervene to mitigate the yearly disaster.
“When the flood occurred in 2012, l was the director of lands. Then, we did a valuation of all affected properties for the government to pay and possibly allow the people to evacuate forcefully. But unfortunately, the government refused to pay; rather they did a rehabilitation centre for those whose properties were affected.
The Chairman, NIESV, Kano State chapter, Abdulatif Abdulaziz, said the flooding has a tremendous impact on the real estate sector in Kano because a lot of developments were not properly carried out in line with the building regulation.
He said when the flooding occurs; property managers are also at the receiving end, adding that it erodes the value of property as buyers will naturally run away from properties or real estate locations that are susceptible to flooding.
“During flooding events, a property can depreciate as much as 50 per cent. A property that is worth N50million for instance, if exposed to flooding, can lose its value by 50 per cent. If a buyer were to buy the asset, he might pull down the building and end up buying the land that’s worth N20 million.”
“Areas that have been affected by flood in Kano include Maiduguri road/Taraumi, Raijiyar Zaki, Bachirawa, which are highly populated and clumsy urban areas. What happens in Kano is that most of the buildings were built in such a manner that with little rain, water finds its level into some of the houses.
“Kano is also reputed for not constructing good drainage on most roads. When constructing buildings, one would have expected that we take into cognisance the elevation of the road vis-à-vis the building constructed. One also expects that the supervising agency approving the buildings will call the attention of developers to the rules and regulations. Even where we have drainage the attitude of the people to proper management of refuse is very bad and this prevents free flow of water,” Abdulaziz said.
The immediate past chairman, NIESV, Anambra state chapter, Justin Okaro, noted that during periods of flooding, no investor wants to buy nor lease any property in affected locations.
He said most of the tenants are also vacating the area because most of the properties are inaccessible and the only option is to use a boat to enter most of the storey buildings.
“The flooding has negative impacts on most properties in those areas. The demand for houses in the area is low and investors are wary of investing. If they invest, they have to ensure buildings’ foundations are high and this will impact on the cost of delivery of projects.”
A past chairman, NIESV Delta State, Chris Okolo, confirmed that the impact of the crisis on houses in the hinterland axis of the state has been overwhelming. However, he said there hasn’t been any significant effect on property market in Asaba because the flooding is short-lived and can be attributed to drainage issues.
He said: “The impact on the residential property market may not be too high in Asaba because the affected properties are not on hot demand. Yes, some areas in Asaba has had some impact because it is on a low plane but the impact is more in Isoko and Kotopata villages where people’s houses and farmlands were submerged because they are very close to Rivers but such properties don’t readily come into the market.”
“People may move out of the affected areas for some time and later move back when the flooding goes away because as poor people, they don’t have the money to look for alternative homes. It is in the urban centres that you see market values been affected by forces of demand and supply.”
Source: Guardian.ng
