Private sector-driven real estate is the solution to Nigeria’s housing challenges. Oakwood Heights Limited, for several years, has contributed immensely to the development of Nigeria’s real estate industry despite its challenges.
Government policies and partnerships
Nigeria’s real estate industry is developing at a fast rate. This is made possible by policies of the government, private companies and other growing sectors of the Nigerian economy: such as tourism, power, and telecommunications. Through several housing schemes and policies in partnership with private real estate companies, the government has assisted civil servants in owning a home. Private corporations are also building housing estates to accommodate their employees. This has resulted in the increase of professional developers in Nigeria’s real estate industry. Nevertheless, this promising industry has its challenges and expectations, affecting the realization of its real potentials. The country currently has a 17 million housing deficit and requires no less than 700, 000 houses annually to bridge the gap (Vanguard Newspaper, January 2021).
The approval process
On title perfections real estate developers often experience delays in obtaining approval from Land Registries for land. The administrative process involved in the registration and land allotment is a burden to real estate development. This can make a developer lose its means of funding and even attract higher interest rates on loans obtained for development. The developer’s work plan may also be interrupted, resulting in increased cost of construction and housing prices.
Corruption
Bribery and corruption is also a hindrance in the real estate industry. A recent survey revealed that land registries had remained a cesspit for bribery among other public offices in Nigeria (Guardian Newspaper, September 2020). As a result, professional developers may be denied approval and building permits despite meeting the preconditions necessary for land allotment in favor of those who didn’t meet the preconditions. This has resulted in the non-compliance of construction and environmental laws and the collapse of buildings, and several ecological disasters.
In addition, the depreciation of our currency (the Naira) is a challenge for real estate developers. Over the years, the Naira has been unstable, primarily due to the oil price fluctuations and poor economic policies. This has resulted in a high interest rate, inflation of building materials, and high construction cost, which is a setback for most real estate developers.
Private real estate developers and companies can achieve a lot to minimize the deficit in the country’s housing sector if impactful policies from the Nigerian government complement their efforts. Fortunately, many policies are put in place by the government to support local & foreign investors, the financial sector, and real estate developers.
The steps taken include:
- The government partners with private real estate developers to develop housing projects for the public, PPP (Public-Private Sector Initiative). For instance, the mandatory 2.89% of pension funds investments in real estate.
- The government has established special agencies to streamline the process of land allocation and registration to minimize and eliminate bribery and corruption, administrative bottlenecks hindering and slowing down the growth of the industry.
- Increase in foreign direct investment, which has resulted in a partnership between foreign investors, local real estate companies, and landowners.
Despite the challenges affecting the real estate industry, the real estate sector will continuously improve. The industry is becoming competitive, and stakeholders are challenged to do better strategically in planning. Real estate business, either estate development or the marketing of properties, needs patience, honesty, and hard work. Regardless of these challenges, success awaits anyone who abides by the industry’s rules and regulations upon which the real estate industry thrives.
For inquiries, please reach out to us on 07047214004 or send us a mail at info@oakwoodheights.com.ng