The provision of basic real estate infrastructure and services as an effort integral to human survival and sustenance is majorly an outcome of tangible private or public initiative on land resource utilisation.
The delivery of requisite infrastructure as a social responsibility is usually capital intensive and viewed mostly as the prerogative of the government. Adequate supply of infrastructure is paramount towards significantly addressing the insatiable and ever-growing housing need and issues bordering on social, economic and physical aspect of the society.
Real estate asset, as a part of the larger environment, comprises a mix of both natural and man-made features. It is imperative to note that real property value does not exist in isolation, the creation of values in real estate development is arguably subjected to certain changes and occurrences playing out within the overall environment.
Real estate investment performance is in most situations measured through the appraisal of infrastructural sufficiency in terms of relevance and functionality of amenities supplied. The placement of value on developed property is influenced actively by factors dictating the extent of appreciation in real estate value or otherwise, thus, economic viability of any property is largely dependent on the degree and quality of physical improvement available in a specific location.
In developing countries, issues of overpopulation and limited resources created by high financial cost and economic hardship have impacted negatively on the ability to adequately bridge the yearning gaps in infrastructure supply. The failure to appropriately handle infrastructural need through effective policy implementation have culminated to a situation of deficit in physical development.
Emerging issues of low quality infrastructure delivery due to financial strain have led to frequent breakdown of amenities prompted by excessive pressure exerted on few facilities available to the public. The existing challenges of infrastructural provision have amounted to rapid decline in property market performance.
In Nigeria, the maximisation of profit as anticipated by real estate investors have appeared not to be fully realised, considering difficulties faced in generating admirable yield from property returns. The deviation in expected returns from property investment is hinged essentially on the deteriorating condition of road and transport facilities, power and energy system, waste and water treatment amenities, healthcare delivery services and other necessary utilities.
People’s preference for settlements endowed with requisite infrastructure often motivate tendencies for increased migration from areas having low infrastructural supply to new areas possessing favourable number of infrastructure. The effect of inadequate infrastructure on real estate development which include high vacancy rate arising from void created in abandoned area and the formation of potential environmental risk and pollution in newly migrated area frequently give rise to overcrowding which affects property value on the long run through gross reduction in profit margin or complete financial losses.
The alleviation of these challenges could be ascertained ultimately through the initiation of sustained synergy between public and private entities in order to reduce financial burden and promote efficiency in the supply of infrastructure.
Amunega Ayobola Ibukun
[email protected]
