2017: Nigeria’s housing sector in perspective

There is undoubtedly lull in the   real estate sector in  2017,  judging  from the views of the players in the sector. The real estate sector, according to experts was at low ebb in the year under review due to the economic recession that occurred during the year. But they were  of the view that the […]

There is undoubtedly lull in the   real estate sector in  2017,  judging  from the views of the players in the sector.

The real estate sector, according to experts was at low ebb in the year under review due to the economic recession that occurred during the year.

But they were  of the view that the sector could become one of the best employers of labour in 2018 as well as  boost the economy  if identified factors that hampered the potentials of the nation’s housing sector are addressed.

Kunle Awobodu   1st Vice President Nigeria Institute of Building (NIOB) told Daily Trust that real estate professionals were hopeful that the sector will bounce back in 2018.

He said, “We are only hopeful in 2018 because the recession had taken a great toll on the vibrant of construction sector. So, we are hoping that from the beginning of 2018 we will start to get our act together because there so many properties in circulation, there is glut in the property market thereby affecting construction activities.”

Awobodu  said further that  if demand for houses is low due to lack of money from potential buyers,  developers will by extension will be unable to build more houses for sale.

He said, “ It is a matter of demand and supply, once  the demand for  houses  fall,  developers will not have funds to embark on new development  and  that means the construction activities will be low.”

Awobodu commended the government’s policies which encourage partnership and  joint venture whereby  the government will provide the land and the private sector  will source for fund to put up structure or develop building unit on the land for sale.

He urged the Federal Ministry of Lands and Housing to begin to construct houses all over the country because they have been on the drawing table for long.   “And it is time for proper action to embark on construction and to complete the ones they have started and that will boost activities in the construction sector in 2018. And there have been many abandoned projects so we hope that those projects are revitalized in 2018 and this will heighten construction activities.”

Kabir Yari, a town planner and the United Nations Habitat Programme Manager for Nigeria told Daily Trust  that the   issue of recession was  something that determined the property sector in the year under review. 

 He said, “ When you have recession,  there will be less money in the hands of people. The government because of the recession will not have much money to pump into circulation. And you know individuals provide much of the houses.” 

On how the sector could be improved  in 2018,  Yari  said  the government should make disposable income available to the people, saying  the more income available to the people  the more they can build houses of their own.   

“The government had already started its 1millon housing programe so we expect the delivery of the unit now to meet housing demands,” said Yari. 

 He advised the government   to plan ahead as a way of reducing slum development in the country.

“Also as professionals we always advocate that we should plan in advance because that is how we can stop slums.  If we plan ahead, it means that  people will have access to  site land,  not just any land and government  should plan urban development  and   urban expansion and by that there will be more serviced   lands available for housing.”  

Mr. Bunmi Ajayi, former president, Nigerian Institute of Town Planners (NITP) said there was no new policy on housing in 2017.

“As far as I am concerned, there are really no new policy as such that influenced anything. The things we can really talk about are the policy direction and exchange rate and the rated market, which affected the cost of building materials. “

According to him, “The amendment of the Land Use Act is not concluded; we were hearing a lot from the mortgage institutions, but we did not see much; so not much really happened in 2017 to make the real estate sector comfortable.”

Ajayi said that until Nigeria amends the Land Use Act, the nation won’t achieve much as expected in that sector, adding that the National Assembly started by taking the Land Use Decree out of the Constitution, but they did not conclude it. “If the National Assembly and Executive would work together and ensure that they take it out of the Constitution, it would make it easy for people to acquire land and use their title to borrow.”

While admitting that the Federal Government made some commitments towards boosting infrastructure, some states, he noted, did not do anything credible.

“There was an Infrastructural Bank, it never worked. We have the mortgage institutions that are not working. I think we should learn to operationalise all these things to know what exactly what are problems are”, Ajayi added.

To him, the issue of promised 17,000 housing units in all the states of the federation was only a political statement because it involves the land acquisition process, the surveying and several other necessary rigmaroles that would last you about six to nine months before you start talking about the building itself.

According to former NITP chief, the issue of real estate development is a special private sector matter, saying government’s business in it was to facilitate the private sector to be able to work. 

Ladi Lewis, former chairman, Nigeria Institute of Architects, Lagos State Chapter, said the promotion of treasury bills eroded peoples’ appetite to invest in real estate. And because they pay interest upfront, it’s almost like getting your returns immediately, saying that until treasury bill crashes, we may not see much investment in real estate like it used to be.

Lewis said one of the ignored boosters was lack of access to funding. “Most importantly is access to finance at good interest rate.  So, if there are alternative investments, you can’t force people into it. People are only forced to invest in it because they need a roof over their heads or there is scarcity of housing units. If you create artificial sources of finance, which I think treasury bills are, at a very high interest rate, there would really not be a need to invest in real estate”, he said.