Housing Stakeholders Believe Safety, Dependable Schemes Will Reposition Real Estate’s Growth In 2022
Even with the overriding challenges encountered in the development of the Nigerian real estate sector, it boasts of high investment potentials, employment opportunities protect return to investment in Nigeria. As states are facing drop in allocation and limitation in internal revenue generation, the Nigerian government has successfully collaborated with private companies to develop housing projects.
A report by PwC in 2019 reveal that, real estate is valued $230 billion – $750 billion. This presents a case that, the Nigerian real estate is on course. The Nigerian real estate situation is fast developing, the sector posted 3.85 percent in the second quarter of the year 2021 ranking the highest growth level in the past six years. The 3.85 percent growth is the sector’s highest second quarter growth since the 4.95 percent growth in q2’2014.
Experts, who spoke at an event hosted by the Nigerian British Chamber of Commerce, NBCC with the theme, ‘Nigerian economic outlook 2022: intersection with the real estate sector –top real estate trends to watch’ noted that despite the obvious effect of inflation, foreign exchange challenges, insecurity and high unemployment rates, Nigeria’s economic fundamentals remain strong.
According to their argument, Nigeria’s real estate sector is set to continue expanding in the future, albeit at a slower pace than over the past decade even with threatening challenges. They also posited that the way forward for investors looking to invest in the market would be through the residential and industrial sub sector.
The Founder/CEO of RTC Advisory Services Limited, Opeyemi Agbaje identified four straight quarters of positive growth in real estate sector which represent an opportunity for steady growth and expansion in the economy. To him,
the sector will be a key driver for the country’s recovery alongside agriculture, agribusiness, agric technology, healthcare and fintech sectors.
Opeyemi was quoted saying, “Real estate and construction sectors have seen four quarters of recovery, and will provide critical opportunities for economic growth despite the cumulative effect of high inflationary trends and high-interest rates.” He cautioned that the growth would depend on the right policies and improved security in the country.
Rendering support to the opinion above, Chairman of the NBCC Construction and Real Estate Group, Hakeem Ogunniran, disclosed that regulatory and compliance intensity would rise on the back of the collapsed 21-storey building in Ikoyi in November 2021, adding that it would lead to the re-launch of the Certificate of Fitness For Purpose.
Oguniran noted further that, Magodo’s case that threw up a 12-year land judgment early this year might incentivize other judgment creditors. He pointed to other land cases like the unresolved Osapa London that has been on since 2013, and the multiple ongoing suits involving major landowning families in Ajah.
He emphasized “There will be regulatory and compliance intensity, with heightened title uncertainty in high profile locations. However, technology can be expected to take center stage in the sector this year, with extremely strong prospects for growth in comfort homes, led by demand from first-time homebuyers, millennials, young families, and empty nesters”.
Ogunniran, who is also the CEO, Eximia Realty, observed that real estate thrives off the back of strong macroeconomic fundamentals, adding that the 25 percent homeownership rate in Nigeria reflects the challenging operating environment in the country.
On her part, the special adviser to the Lagos State governor on housing, Toke Benson-Awoyinka, harped on the need to curb fraudulent practices emphasizing the state government’s commitment to sanitizing the industry. “This year is going to be different as Lagos is going to tackle fraudulent activities in the real estate sector this year. We will name and shame when the time comes because the returns on investment is unbelievable so there’s no reason to defraud people,’’
Benson-Awoyinka said.
She said the state would, in a few weeks, conclude the foreclosure clause in its mortgage law to build investors’ confidence and provide access to investments when there’s a default in the mortgage payment.
Benson-Awoyinka emphasized the need for individuals that want to buy land to do their due diligence and engage the services of a lawyer when purchasing properties to avoid cases of fraudulent land allocation. “There’s no clear title of land in Lagos called ‘excision in process’ as this means such land has not been allocated. You must search at the land bureau to ensure that a property has a clean title before you begin any transaction to avoid being scammed,” she advised.
Also, Bisi Adeyemi, NBCC president and chairman of the council, observed that the real estate sector had become a major contributor to the country’s economic growth this year.
“The major objective of this event is to examine the opportunities, challenges, and, indeed, the threats in the real estate sector in 2022.
The sector showed positive GDP growth in 2021 and has been identified as one of the sectors to look out for this year. We have assembled distinguished subject matter experts that will ensure we all leave here better informed,” she assured.
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