Th e projection is clearly positive considering the fact that the sector was in turmoil in the previous years following scarcity of funds which arose from the generally dull economic atmosphere and the then latent recession. Cromwell Professional Ser vices International (PSI), which succinctly captured the projection in its Real Estate Industry Outlook 2017, recollected the factors that had impeded the sector, noting for instance that the real estate market was less vigorous in 2015-16 apparently due to the country’s macro-economic and sociopolitical challenges.
According to the body, these diffi culties resulted to the suspension of some planned real estate development projects, slowdown in the growth of rents, inflation of construction materials and labour costs. Th e Country leader, Sola Enitan, said Nigeria remains a major driver of growth in real estate industry going by its population currently estimated at over 180 million plus the yearly average growing rate of three per cent.
“Th e industry is expected to experience an increasing entry of foreign investors, increased joint venture arrangements and development of secondary cities in Ibadan, Owerri, Abeokuta, Enugu and Kano,” he said. On the outlook for the six -geopolitical zones, the PSI said trends across Nigeria revealed a real estate market weakened by socio- economic challenges, but remained optimistic of positive growth rate in 2017.
“Th e Federal Capital Territory also has one of the highest property values in Nigeria and one of the widest variances in value from one location to another within the same state/territory. “Th e eff ects of the economic recession have adversely aff ected property values in the FCT with high vacancy rates, especially in the prime real estate segment. Th is is especially obvious in the poor year-on-year return for 2016”, he noted. In the North West, the real estate market prices have stayed relatively fl at.
Kaduna’s prices continue to suff er from protracted ethno-religious confl icts while in the North East, the instability, destruction and human displacement caused by the Boko Haram confl ict has led to a slump in real estate market prices. Southeast property prices will continue to experience steady appreciation buoyed by increasing market participation while market analysis for South-South shows that the real estate market prices will likely continue to experience moderate growth in 2017. For South-west, property prices in that zone, he said have remained resilient in the face of economic challenges. Enitan also identifi ed increased Foreign and Domestic Investment (FDI) as another signifi cant driver of growth for the real estate industry expressing hope that in the long term, the industry is expected to experience Minister of Power, Works and Housing, Babatunde Raji Fashola Nigeria’s real estate sector is expected to grow at an average rate of 5.39 per cent between 2017-2020, according to forecast by a real estate research and advisory body in Lagos.
PATRICK ANDREW writes on the prospects and what needs to be done to sustain the growth an increasing entry of foreign investors, increased joint venture arrangements and development of secondary cities, especially in Ibadan, Owerri, Abeokuta, Enugu and Kano.
The PSI thinks should the National Assembly successfully expedites the passage of the new bills pending in the national assembly like the Infrastructure Development Bill, Engineering Registration Act (Amendment) Bill 2016, Nigeria Industrial Development and Zones Bill 2016, Nigerian Assets Management Agency Establishment and Regulatory Bill 2016 and the HB 521 National Housing Fund Act (Amendment) Bill 2016 into law in 2017, they will impact positively on the real estate industry. Besides, another driver that could impact positively on the real estate sector and in fact in mass housing development in the country is the national housing programmes of the present administration.
Many are of the view that should the federal government muster the political will to pursue the programme vigorously with the needed policy and fi nancial commitment through federal mortgage bank facility functional and accessible by those to whom these facilities were meant, then achieving the housing needs of Nigerians can be realised. In this regard, it seems the federal government has stepped up its resolve to provide houses to the people through the National Housing Programme currently being executed in 35 states of the federation. Th e ongoing inspection of federal government housing schemes has shown the results of the modest eff orts of the administration. According to the Minister of Power, Works and Housing, Mr Babatunde Fashola, ongoing massive construction works across the six geo-political zones demonstrates President Muhammadu Buhari’s determination to achieve economic recovery and create jobs through housing, roads and general infrastructural development. Fashola, who spoke in Taraba and other states during the four days inspection tour of federal government housing projects, said the National Housing Programme was designed to provide aff ordable accommodation to Nigerians and to create jobs for the teeming unemployed youths, and ultimately get those who had lost their jobs back to work and, thereby, energize the economy.
He assured Nigerians that the present administration was committed to empowering, especially, the vulnerable in the society such as the artisans, welders, bricklayers, carpenters, food vendors, suppliers of building materials and others. In Gombe, where he inspected a total of 76 units of houses in one site made up of four units of one bedroom semi-detached bungalows, 48 units of two bedroom semidetached bungalows and 15 units of three bedroom semi-detached bungalows, Fashola reiterated government’s resolve to empower people through construction stressing that: “Th is is all what it is about; it takes care of the vulnerable members of our society. Th at is what housing does; it energises the industry and it energizes employment. You will see trucks moving in and out, you will see bricklayers, you will see carpenters, you will see welders, you will see food vendors; and this is what we are igniting across the whole country”. “That is why President Muhammadu Buhari said this year’s budget is a budget of growth, getting people who have lost their jobs previously back to work, putting money in their pockets and restoring their dignity so that every morning they can tell their wives, they can tell their husbands ‘I am going to work’ ”, he said. In Ogbomosho, Oyo state, where he inaugurated 100 housing units, a project funded by the Federal Mortgage Bank of Nigeria (FMBN), Fashola re-emphasized that meeting the housing needs of Nigerians was a major priority of the federal government. He commended the bank, the developer and other stakeholders, who contributed to the completion of the project and noted that the government, through its various agencies, was replicating similar housing programme across the country, to meet the housing needs of Nigerians and create employment for Nigerians executing the projects.
A major stumbling block to the realisation of the national housing programme may be the FMBN which had, in the past, failed to make available needed facilities for desirable ones to secure for their housing needs. The invincible hurdles and unnecessary bureaucracy it usually imposed on genuine persons desiring to obtain loan facilities in the past has cast aspersion on whatever facilities it claims to off er.
Abuse by government officials and highly placed political appointees often makes nonsense of whatever objective the government had intended to achieve through the FMBN facility. Th erefore, the claim by the FMBN that it has turned a new leaf should be seen in the way it makes its facilities accessible by the average persons not off ered on political patronage.
According to the Managing Director of the FMBN, Mr Richard Esin, the mortgage bank had since the inception of the current administration contributed signifi cantly to eff orts being made to address the housing needs of Nigeria. Speaking in Ogbomosho, Esin said; “Th e NHF is a scheme into which Nigerian workers in the public and private sector, earning a minimum of N3,000 per annum, contribute 2.5 per cent of their monthly income. “On the basis of their consistency in the contribution, Nigerian workers become eligible for mortgage loans at a concessionary interest rate of six per cent,” he said. Vice President, Prof Yemi Osinbajo, only last talked about corruption and its attendant impact on development stressing that “it is an existential threat, it is a survival issue.”
“We need to address the fundamentals of that abnormality. I think it is very important, especially for us who are in government today either as legislature or executive, to address this issue. It is a fundamental issue; everywhere in the world, even where they do not have the problems we have, they are addressing the issue.”