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How real estate sector can serve as tool for economic transformation

By Victor Gbonegun
29 August 2022   |   2:07 am
Housing professionals have expressed optimism that the real estate sector could serve as a veritable tool for economic transformation if the enabling environment is created and synergies between the government and private sector...

Housing professionals have expressed optimism that the real estate sector could serve as a veritable tool for economic transformation if the enabling environment is created and synergies between the government and private sector is developed to maximise value creation in the industry.

The operatives argued that there is connection between land, infrastructural development, technology, data and property taxation and effort to harness them for overall development.

Speaking at a forum, entitled: ‘Real Estate as Tool for Economic Transformation’ organised by the Alumni Association of Lagos Business School, the Managing Director/Chief Executive Officer, Global Property and Facilities International Limited, Dr. MKO Balogun, said despite the opportunities in the sector, the real estate has remained flat in the last two years in terms of its contributions to the Gross Domestic Product (GDP). He added that while other countries in Nigeria’s category, recorded two digits contribution to the GDP, the Nigeria’s real estate had single digit growth.

Balogun said: “Nigeria has not really explored potential of the sector. When the Federal Government did its economic sustainability plan after COVID-19, real estate was a major component. Building more houses will transform the economy because it will generate more work.”

“We need to have conversation with the government on infrastructure plan before developing housing projects. Most times, the infrastructure we plan for when embarking on development cannot support the development.”

The Managing Director/Chief Executive Officer, Afriland Properties Plc, Mrs. Uzo Oshogiwe, stated that real estate is a major source of value in both developed and developing countries. She pointed out that in the United States, households have $9.6 trillion or 16 per cent of their wealth in real estate.

According to her, land and property taxation play significant roles in the infrastructural development of any country as such should be taken seriously.

“Since the relationship between land, infrastructural development and property taxation cannot be divorced, it follows that efforts should be made to harness this further. However, precaution should be the guiding principle so as not to discourage developers and investors from related activities. Close to half of the world’s wealth is tied to real estate. It therefore remains a veritable source of revenue and a catalyst for economic growth if exploited properly and in the right manner,” she said.

Oshogiwe, said there should be tax rebates to cushion the economic effects on the sector. This, according to her, will promote increased investment, drive affordable housing initiatives and create stability in the industry.

She urged government to plug all loopholes in the tax collection system by establishing a centralised and digitalised system that will be responsible for all real estate payments.

“Real estate is bogged down by too many contentious taxes and charges with ambiguous applications that the government needs to align for the good of the nations’ economy, failure to give proper accounts of the taxes collected and poor infrastructural amenities to support the sector, absence of tax rebates amid inflation and volatile currency is a major contributor to high cost of housing,which is a militating factor against affordable housing,” she said.

The Chief Executive Officer, Landmark Africa Group, Paul Onwuanibe, stressed that investment in infrastructure, infusion of technology, leisure hub and mixed-use destination are vital to real estate development, which is a long-term venture.

Onwuanibe, said there was need for collaboration between the government and private sector to improve regulatory activity, as well as training of innovators and artisans, who are the human resources in the sector.

The Founder/ Chief Executive Officer, Estate Intel, Mr. Dolapo Omidire, said the sector has phenomena impact in any economy, helping people grow their wealth, adding that buying a house could even be the biggest investment an individual would ever make.

Omidire, said if the industry is well organised, it will serve as a veritable way to generate revenue for the country. For him, data is vital to the sector because it empowers people and investors to make better decisions, stressing that deployment of technology in housing will boost access and efficiency of investment opportunities.