‘How to unlock real estate potentials for national development’
Following increasing growth in Nigeria’s low and middle income population, stakeholders have called for the unlocking of the real estate sector to drive national development. They said with right reforms and political will, the sector will spearhead a momentous growth because of high demands of housing occasioned by the increase in working age population.
The stakeholders, who spoke at the 4th West Africa Property Investment summit and Expo in Lagos, were drawn from policy makers, economists and researchers, investors, developers, lawyer, realtors and bankers. Leading the call in the two-day event themed: Re-calibrating supply and demand for Sustainable Growth”, Chief Economist for PricewaterhouseCoopers (PwC) Nigeria, Dr. Andrew Nevins said the right reforms in land and property ownership could unlock $307billion dead capital or 81 per cent of Nigeria’s Gross Domestic Products.
Dead capital, he said, are capital tied up in unused assets remains a critical issue as the tendency to invest long term by Nigerians is low. Nevis who doubles as partner in the firm, explained that since real estate buttresses the financial sector, enabling the creation of asset backed loans and securities, it cannot work without a proper land registry as banks cannot lend against a property without evidence of ownership.
The current land titling system in Nigeria, he said, is onerous and excludes many people from formal ownership. “Based on these facts, real estate is one of the most critical sectors that if reformed will propel growth and alleviate poverty in Nigeria”, he said.On his part, the Chief Executive Officer, Broll Property Group, Nigeria, Bolaji Edu stressed the need for provision of infrastructure and maintenance of existing ones because of its impact to the Nigerian real estate market.
Giving examples of the growth in Lekki axis and Apapa, he regretted that some of the existing infrastructure are developed for a certain population size, which has been outstripped. He therefore called for a critical thinking by stakeholders to ensure a balance between supply and demand in the sector.
Also, the Executive Director, Policy, Partnerships and Business Development, Nigeria Mortgage Refinance Company (NMRC), Dr Chii Akporji noted that since infrastructure cost constitute 20 -25 per cent construction cost, it inhibits housing delivery and affordability.According to her, there is need for a transparent partnership between the public and private sector to incentivize investments in the housing sector.
Dr Akporji stressed that private collaboration with government with less focus on the bottom line will guarantee more social responses to providing these houses,On the part of NMRC, she said, a lot have been done to ensure incremental decrease in mortgages rates and providing liquidity to the country’s mortgage market.Other interventions include the model mortgage foreclosure law with advocacy for states to establish mortgage board to create a one stop shop for all transactions to shorten land processing.
According to her, NMRC is also leveraging on technology to bring land administration into block chain and thereby enhance transparency on mortgages.Also panelists made up of Partner, Africa Law Practice (ALP), Nigeria, Olasupo Shasore (SAN), Partner & General Counsel: West Africa Market Area, PwC, Nigeria, Moshood Olajide, , Chief Executive Officer, Landmark Africa Group, UK, Paul Onwuanibe, Real Estate Partner and Legal Practitioners, Olajide Oyewole Nigeria, Abutu Odu noted the need for reform in the real estate sector.
“There is also a need for the decentralisation of policies to increase efficiency in the real estate sector. Multiple taxation continues to be a problem in the real estate sector and there should be an ease of compliance for businesses.“The Government needs to keep to contracts. The Land Use Charge is the harmonisation of all land charges but there should be a breakdown of the responsibilities for people who are to collect and people who are to pay”, they said.