THOUGH last year was a dificult year for the property market, there are hopes that the industry may pick up this year.
However, despite this optimism some experts believe that this may only be, if the government works to discourage slush funds in the sector.
Early last year, there were predictions that the real estate market would see more supply across the various subsectors and record varous demands as a result of paucity of funds.
It was also said landlords would be more open to a zero increase and a slight reduction in rent renewals as tenants were not willing to pay more, citing the economic times, job losses and poor infrastructure service upgrade in homes.
Critics also believe the law is favourably disposed to tenants against landlords, but this will soon change as the Lagos State Government, through the Special Adviser to the State Governor on Housing (MOH), Mrs. Toke Benson-Awoyinka said the state government is willing to partner the private sector to develop the housing sector in creating awareness to residents contrary to the erroneous belief that the government is hostile to private sector.
She said it is the desire of the administration to ensure that every resident prospers and contribute to the state’s growth.
She stressed that the 21st Century Smart City of Lagos requires that real estate stakeholders and transactions be captured electronically as real estate is to Lagos as oil is to Nigeria.
She said: “There is the need to provide, develop and continuously capture and update a Unified Central Database of Real Estate activities within the state while making it accessible for objectives of planning and policy decisions.
‘’Our vision is to provide an enabling environment and transparent Real Estate sector conforming with international best practices while safeguarding the interests of all stake holders.Our mission, however, is the creation of an innovative and sustainable environment to promote Lagos as a Real Estate Investment destination in Africa and the World.”
She listed some reasons that made the government to come up with Lagos State Real Estate Transction Department (LASTRED) to include frustrations by the public and the losses they encountered. She said her office had battled many cases of transaction failures.
She said in the last six months, they have dealt with large scale fraud.
A former Chairman of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) Mr. Orimalade Rogba, said other sectors suffered difficulties last year apart from agriculture where many people ventured.
According to him, real estate has been slow, and that the rate of demand for housing units had been abysmally low, especially in the residential section.
He said: “For the low-income segment, there were more developers who were into higher end, focused on the lower end or affordable houses; more people pushed towards that bracket with a lot of deals such as structured payment.
“The high end went down because demand wasn’t as much as before; one of the reasons being the uncertainty of the economy which made investors to be conservative in releasing their funds. The summary is that a lot of developers and players that were traditionally focused on high level development now play in the affordable class of N10million to N15million or less.”
He stated that due to difficulties in the property market, a lot of developers created housing units targeting the youth.
“The target now became studio apartments.The focus on bigger houses reduced,” he added.
On the commercial and retail side, he said there was a bit of demand driven by incentives from landlords.
He however stated that development of new retail and commercial building went down significantly, adding that “overall, the property market had not been encouraging.”
The President, Real Estate Developers Association, Mr Ugo Chime, said a lot of factors slowed the real estate activities.
He stated that during election period in the first quarter of last year, the demand for real estate was low due to uncertainties.
An estate surveyor and valuer Otunba Sola Enitan, said the growth in real estate in certain cases was fuelled by slush funds. He said for any country to grow economically, the fight against corruption and money laundering must be thorough, adding that money laundering affects a nation’s economy.
He maintained that corruption is endemic in the sector, noting that over 80 per cent of proceeds of corruption founnd their way into real estate, properties or the building of assets. He said it is evident in high brow areas of Lagos and Abuja where massive buildings are unoccupied for years.
He said: “A high share of the population and businesses harbour un-official income. There is also the existence of a black market in the foreign exchange market, it is as if it has been legalised. Corruption among state executives, law enforcement and judicial officers is rampant. Poor control of financial instruments such as shares and bonds, insufficient requirements for transparency of financial transactions and ownership of assets encourage money laundering.”
Enitan regretted that corrupt people brought their ill-gotten funds to the sector and pleaded with anti-graft agencies to check this.
He observed that it was difficult to estimate the growth of the sector as some of the prices of buildings were not real as a result of the source of the funding.
Source: thenationonlineng
