A business forum tagged “Real Estate Financing in Nigeria: Modalities, Opportunities and Challenges” organised by the International Real Estate Federation, FIABCI, Nigeria Chapter was held recently in Lagos, focused on the huge housing deficit currently facing the country, the real estate stakeholders advised the government that by building 500 houses in each of the 36 states in the country, it could create over one million jobs in Nigeria.
The real estate experts admonished the government to grasp the untapped investment opportunities that are available in the real estate sector of the economy and also provide another means of financing apart from the present discouraging traditional bank loans in order to attract investment.
The capital intensive nature of real estate demands proper and adequate funding. In recent times, most investors and developers fund their projects from either own savings or loan facilities from lending institutions, the analysts added. The most common sources of financing for real estate available in the country at the moment include equity and debt, real estate developers, private equity companies, insurance companies, governments, individuals, pension funds, primary mortgage institutions (PMIs), and commercial banks.
At the forum, the real estate professionals expressed a major disliking that the housing sub-sector is now primarily dominated by foreign investors while the local investors are running at a loss which they attributed to the unavailability of funds.
Speaking at the forum was Mr S.P.O. Fortune-Ebie, Managing Director of the Federal Housing Authority and the former President of the Nigerian Institution of Estate Surveyors and Valuers, he advised the government to make funds available in order to reduce mortgages as well as making land titles available to the people. ”The most important thing to do to address this alarming housing deficit in Nigeria is that government must make funds available. Whoever is telling the government that housing is not subsidised is a liar. Even recently in the United Kingdom, the Prime Minister has worked out a scheme for new house owners with subsidies for students to become new house owners but here in Nigeria where we practice voodoo economics, the President is told that housing is not subsidised. All over the world, housing is subsidised. Secondly, the question of title to land must be concluded and land made available to people”, he said.
Also, present at the forum was the Managing Director, FSDH Asset Management Limited, Fund Manager, Africa Capital Alliance, Mr Obi Nwogugu
who explained that until there is a real and functional mortgage system in Nigeria, things in the housing sector would be stagnant. According to him the fact that a buyer has to wait for at least 20 years before he can almost conveniently purchase a house is in fact, a big problem. He noted that the major issue that has led to a significant increase in housing deficit in Nigeria is the “policy somersault” by successive administrations which has discouraged real estate investors from dealing with governments in addressing the problem in the country.
Overall, a lot of emphasis was placed on the opportunities in real estate and the government getting in on it as soon as possible. It was also strongly believed that the reason the supply of residential housing in Nigeria seems redundant is because the citizens cannot afford to buy them and help from the government is needed on the issue by subsidising housing in the country.