Experts seek conducive environment for housing
To unleash the full potential of the West Africa’s property market, real estate professionals have pushed for significant improvement in the operating environment.
They argued that there was a need to deepen the use of property technology (PropTech) to improve home production and operations.
They also called for a major shift in land ownership and title regulations to unlock significant capital inflow into the sector.
The experts spoke at the seventh yearly West Africa Property Investment Summit (WAPI), themed: “Property Market Redefined,’’ which was held in Lagos recently. The forum hosted more than 70 speakers and attendees, representing over 170 firms.
According to the experts, increased investment is expected in non-traditional sectors such as residential, logistics and warehousing, student accommodations, healthcare and data centres.
Leading the discussion, the Partner and West Africa Tax Leader, Deloitte, Mr. Yomi Olugbenro, explained that there are emerging and existing constraints in the market, which threatens its growth.
These, he said include the Land Use Act (LUA), which requires the state governors in urban areas or the local government chair in rural areas to consent to every land acquisition transaction, the devaluation of the naira and heavy reliance on importation, which hamper the development of the property, the ease of doing business that continues to be a constraint despite recent improvements and administrative bottlenecks, regarding lack of transparency and limited access to finance.
Olugbenro said with increasing poverty levels, affordability of housing have become a bigger challenge, while interest rates on mortgage are falling, access to mortgage is still out of the reach of the majority, especially those in the informal sector.
Despite these, he observed that there are value extractions and opportunities for blockchain and tokenisation, logistic parks and retail, mortgage, tourism and hospitality, crowdfunding and local sourcing of construction materials.
He said: “There should be mortgages with longer-term, lower interest and lower equity contribution to increasing demand, fast-track the finalisation of PENCOM guidelines to enable pensioners to access their pension balance for funding mortgage equity contribution.
“It is necessary to regulate and standardise real estate crowdfunding to build trust, transparency and drive growth. It requires investment in research and development, which may be aided by instituting the right incentives while quality control and sustainability concerns need to be addressed in local sourcing of construction materials.”
The Chief Operating Officer, Landwey Investment Limited, Seun Eyitayo, who represented the Chief Executive Officer of the firm, said being innovative and providing the kind of housing people needs would form a direction in the industry, adding that the combination of multi-purpose property developments and PropTech are significant indicators of future trends.
She urged operators to embrace the PropTech and digital transformation, collaborate and develop eco-friendly projects to reduce greenhouse gas emissions as well as improve customer relationships.
On his part, Chief Executive Officer, Dutum, Mr. Tope Runsewe, called for support for local capacity in the construction industry through funding, adding that if local operators do not have the capacity to participate, knowledge would not grow.
He said: “Local construction service providers should be provided with the support of the government to grow. That support is providing platforms, funding and opportunities that can make us compete. When foreign companies come with cheap funding at zero-per cent and local contractors don’t even have access to funding that comes with high interest, it is a struggle to compete,” he said.
The Chief Executive Officer, Purple Group, Mr. Laide Agboola, stressed the need for government to issue guarantees to prequalified members of the real estate sector that would allow them to enter the market to raise private sector funding for projects.
“The executive order on the involvement of local capacity in projects is a good one but the implementation is the problem.”