To reduce the estimated 17 million housing deficit in Nigeria, the federal and state governments should create conducive business environments to enable investors build affordable homes, the Managing Director, Octo5 Holdings, Babajide Odusolu, has advised.
According to him, the provision of mortgages by government is not enough, as the tough operating environment in the built industry was making it difficult to construct low cost homes.
“Government is saying it will provide mortgages, but the problem is not about providing mortgages,” Odusolu, a former Managing Director, Ogun State Property Investment Corporation, stated.
He added, “The challenge is for the government to create an environment that will enable the supply side to provide affordable homes.”
He explained that investing in the real estate sector was capital intensive and as such, the right policies should be in place to encourage private investors to participate.
Odusolu said, “The property industry in Nigeria is very interesting; for instance, there is a Nigerian mortgage insurance company that will tell you that they can provide mortgages for homes but the homes would have been built.
“Now, they want us to build homes that are below N12m and N13, but I’m going to use investors or private sector funds to build the homes. Now, how will I build those homes when I have to add all my costs?”
He added, “I have land acquisition cost, land perfection cost and other services costs, which have already build up to about 30 per cent of my production cost. And after that, I add the construction cost and then put profit on top of these costs.
“Now tell me, how can such homes be affordable? So the issue is to provide an environment that will enable businesses and private investors to come in, invest and make the homes affordable. That is what should be done by government.”
Odusolu, who also served as a key member of the Ogun State Housing Team and Director of Gateway Mortgages Limited, noted that a lot of investors were willing to invest in the real estate business across the country.
He, however, stressed that such investors would be encouraged when the right policies were put in place by government to ensure the construction of affordable homes nationwide.
Source: punchng
