Experts urge holistic reform in real estate sector

To revive the nation’s real estate in Nigeria and position it for bigger role in the Nigerian economy, experts have called for a holistic strategy for the sector reform.

At present, the country has an extremely low ratio of credit to Gross Domestic Product (GDP) with the housing and construction sector in Nigeria, accounting for only three per cent of the country’s GDP.

In other economies like the USA, Britain, and Canada, the housing sector contributes between 30-70 per cent of their GDP.

Furthermore, Nigeria will in 2050 be one of the third most populous countries in the world and with 75 per cent of citizens being 35 years and below, this population represents a growth opportunity for Nigeria meaning that the country has to create jobs and shelter for these people and the easiest way is through the housing.

Consequently, experts said the real estate sector can play a much bigger role in the Nigerian economy with proper reforms.

Leading the call at the 2019 Conference of the Nigeria Group of the Royal Institution of Chartered Surveyors (RICS) in Lagos, Managing Director, Exima Realty, Hakeem Ogunniran said affordable housing may be a mirage without commoditization of the real estate market as done in other climes.

Ogunniran, who called for an effort to ensure the sanctity of titles in the value chain, recalled the recent Supreme Court’s judgments in Agidingbi, Lekki and Iwaya, stressed that such uncertainty had a negative impact on financiers, buyers and investors as land titles can no longer be guaranteed.

Also, the Managing Partner, Costec Consultants, Mr. Agele Alufohai reiterated the call for construction industry bank to boost the sector, while RICS Advisory board member, Mr. Emeka Eleh said deregulation is good but there must be reforms to make it happen.

For the co-founder, Alitheai Capital and Managing Director, Ogun State Housing Corporation, Mrs. Jumoke Akinwunmi, title infrastructure monitoring of development in line with instant regulations are big issues.

Others, who spoke include Managing Director of Family HomeFunds, Femi Adewole, Director, Echostone Nigeria, Sammy Adigun and Tope Adebgonmine, a real estate practitioner.

On his part, the Kaduna State Governor, Malam Nasir El-Rufai, called for a sustainable action plan to address the housing gaps in the country, saying tackling this gap presents an economic opportunity and a window to promote social justice.

The governor noted that the housing sector has the potential to generate employment, increase productivity, raise standards of living and alleviate poverty.

He, however, regretted that while the real estate sector is growing, there is a low homeownership rate in Nigeria, at 25 per cent, compared to 84 per cent in Indonesia, 75 per cent in Kenya and 56 per cent in South Africa.

According to him, the major issues that continue to affect housing in Nigeria include constraints related to the high cost of securing and registering secure land title, inadequate access to finance, slow administrative procedures and of course the high cost of land.

Given these challenges, Mallam El- Rufai said, a sustainable action plan is required to reduce the housing gap in the country, noting that some efforts have been made, but there is a need to bring it all together.

Expounding on the theme: “Unraveling the Real Estate Sector Challenges in Nigeria: Regulation, Finance, and Development”, the governor, noted that most government housing projects in the past have focused mainly on the elite class.

Represented by the Kaduna State Commissioner of Housing and Urban Development, Hajia Adebola Ibikunle, El-Rufia said the state with nearly five per cent of Nigeria’s population, accounts for up to one million units of the 17 million housing deficit in Nigeria.

According to him, the state has widened and broadened the mortgage system to support the sale of government houses to enable Kaduna citizens to buy houses and pay over 15-20 years paying at single-digit interest rates.

The governor further called on governments at all levels to create enabling policies including land Documentation, a national framework to support housing research, policy development, and implementation.

Earlier, the Chairman, RICS Nigeria Group, Gbenga Ismail said the workshop is aimed at determining practical pathways that will lead to a clear and transparent real estate sector, one that drives development and economic value and fully embeds international standards.

He urged professionals in the built environment to act in the public interest by influencing and contributing to the makeup of the sector, which is facing enormous challenges at present.