REDAN seeks subsidy for real estate sector
The President of the Real Estate Developers Association of Nigeria (REDAN), Rev Ugochukwu Chime has said that poor land administration, especially the high cost and long period of securing titles have continued to pose serious challenges to housing development in the country. He urged the government to provide subsidies for the real estate sector.
Chime argued that globally, governments do not allow the affordable housing segment and the real estate sector to be thrown open to the market forces but rather provide subsidies as a way of attracting investment and estimating activities in the sector.
Speaking with journalists at Katampe, Abuja during the unveiling of The Mews Estate built by Eximia Realty Limited, Chime who stressed the need to reduce the transaction cost so that investors who have a little capital appreciation of 15 per cent on their assets can as well exit that investment.
According to him, the country has not been able to manage land administration to make it efficient in terms of transaction cost and transaction time. “That is why you can build a house in six months and it will take you two years to get titles in some states. That is very terrible. We are looking at the land administration process to reduce transaction time and cost.”
According to the REDAN president, “ We need to computerise some of the records so that the issue of searches, double allocation and titling will end. It is worrisome for an investor to come and invest in land or property only to be told that somebody else owns the property.”
On the Land Use Act, Chime argued that land use cannot be changed because of the existing socio-political situation, adding that people do not trust the Federal government to give them right over land because of issues like bandits and kidnapping across the country.
Also speaking, the Chief Executive Officer of Eximia Realty Limited, Mr. Hakeem Ogunniran observed that the real estate industry mirrors the economy and that when the economy is struggling, as we currently have, the real estate also struggles.
“ In a struggling economy, your assets conversions cycle is much longer than what it ought to be ordinary but the market is changing. There are a few initiatives recently. The new finance Act, which will help to catalyze the real estate asset classes is a major development, and the fact that coupon rates for treasury bills have dropped.”
Ogunniran noted that the company had been working to redefine the entire landscape of building by adding value to the real estate sector, adding that when the company was launched, the ambition was to deliver 5,000 housing units in five years and we have started. We have three major projects currently and we are creating other products to ensure that we have a sustainable framework to deliver as we have promised.”
He observed that some of the challenges faced during the development of the projects include high cost of land, cost of perfection of title, the problem of long term funding, competition amongst others.
He appealed to the government to look to these challenges and help provide incentives for developers so as to foster the building of affordable houses.
The pioneer Chief Executive Officer of the Nigeria Mortgage Refinance Company (NMRC), Prof Charles Inyangete observed that state governors have a crucial role to play in affordable housing, starting with providing lands under terms that are favourable to developers.
He stated that it is the duty of the governor to provide necessary approvals and consents that are needed for housing development.
“Every governor should be looking forward to setting aside priority land for affordable housing development. State governments need to partner with developers to ensure that the process of approvals do not take long. There is a need for incentives for developers to develop in ways that are affordable.
Inyangete said developers need to have a concession on issues like taxes, which is important for development and there is a need to consider this in housing development.
“The playing field is not level, titling is a big challenge and titling is critical for funding housing development for developers .if we had a legal environment that levels the playing field, if we have a mortgage and foreclosure law, any state that does that places itself as a state that is ready.