These are not the best of times for many players in the Real Estate sector in Nigeria. This is because business has not been too good, like before. There is a lull in that once vibrant sector.
Over the last 8 months, business has nose dived for many of them. Business is no longer fast paced and profitable as before.
Comparatively, sale of houses and apartments have dropped drastically. In fact, since January, many potential buyers have taken a let’s wait and see approach. Some have also indulged in the Hide & Seek game.
Even some investors who had earlier indicated willingness to buy, have put a stop to their transactions for now. Understandably, the noticeable drop in the sale of houses, flats and apartments has made many property developers and real estate players, unhappy.
What explains the lull in business, which began late last year? City People asked many big property developers what they think. Many attribute it to the 2023 elections and the down turn of the economy. Although the elections took place last March, up till now the political situation in the country has remained topsy-turvy.
The election was rancorous with the 2nd and 3rd place winners heading for the courts.
Although President Bola Ahmed Tinubu has resumed work since he was sworn in on May 29, he still trying to find his fact. He is just putting in place a cabinet. So the lull facing the real estate sector is as a result of the unstable polity.
The GMD of RevolutionsPlus, Dr. Bamidele Onalaja, who is the President of Lagos REDAN confirmed the lull in business a few months back when City People interviewed him. He attributed it then, to the forthcoming elections in March and how many investors were waiting for the outcome of the elections.
City People spoke to a female player in the real estate sector, who does not want her name mentioned and she confirmed the trend. On the possible reason, she said I believe people held back on investments because of the elections. After the elections, the forex troubles started, high costs of building materials, etc. I think financial power declined because of the economy and subsequently affected Re-investments and developments”.
Another private developer who is doing well also commented. “The situation is normal. It is to be expected. We have a new government. You’re bound to see a lot of wait and see and delayed decisions.”
Another property developer who wants annonymity also confirmed the lull in the real estate and attributes the problem to the Economy. “It is serious ooo. But all these new fiscal and monetary politicies will help, but it will take time.”
It was the same thing another Lagos property developer said. He is angry. “Yes, there has been a lull generally in Real Estate business, especially in Lagos State. I blame the Lagos State Government. The government has not helped. The new government policy in Lagos has destroyed the business to be sincere”. “They are insensitive and careless. They are selfish and very unserious.” How we asked him? “They have come up with bogus charges and lack of infrastructure.” How specifically, we probed further? “They are always bringing political sentiments into one of the most profiting sectors in Lagos. Labsca and Laspra have been sealing up estates at will. No negotiations nothing. Some of them act with impunity. We build roads ourselves, without funds, to all our sites. Major roads in Lagos are bad, not to talk of the primary ones. That is why majority of property developers are relocating to Abuja or Port Harcourt, where they think it is more conducive for the business. The sad part is that the administration in Lagos is not concerned about it”.
A rich real estate guru who plays big on the Island in Lagos disagrees. He says there is no lull ooo. People are still buying ooo. But not much as before”.
The GMD of one of the biggest real estate firms in Ikeja, also confirmed the lull. “It is as a result of negative economic policies. That plays a vital role in the growth of real estate business”. But he says despite that, there is always constant growth in the real estate sector, either in the downscale or upscale sector of the business”.
“What we are experiencing is that people are demanding lower and cheaper apartments, land and houses. Growth is towards new and satellite towns, which is the downscale experience. Just like food and clothing there is a daily demand. And housing inclusive”
Another GMD of a popular real estate company in Ikeja with branches on the Island also confirmed the lull. “Yes, absolutely”, he says. “Business has dropped”. Why is thee a lull in real estate business right now, we probed further. “There is a lot going on. The economy is a key factor. Things are very hard for investors, clients and buyers right now. But I know it will soon get better with time.
So many real estate companies are going through a lot right now I can tell you that”.
Since February when preparations for the General Elections began, the lull had become quite noticeable in the real estate sector. Many real estate players and developers have recorded low sales, as a result of the political situation.
Many of those who had planned to do Big business with top developers have had to put everything on hold, saying they need to wait and see the shape of things to come.
With the emergence of the Tinubu, the APC presidential candidate as the new President of Nigeria, all hopes are on him. Many of the real estate players that City People spoke to recently hinged their hopes on Tinubu, who they say has a good track record in real estate. Recall that when he was Lagos Governor, he did a lot in that sector. His achievements in terms of housing projects were remarkable. So, they believe that he will provide the enabling environment for real estate business to thrive.
What are his plans for the housing sector? It is contained in his Renewed Hope policy guidelines. “The various federal agencies meant to promote home ownership are too small and fragmented. To address the housing deficit, we will ensure greater cohesion and efficiency by merging these agencies into a new, more competent body. This new entity will inherit the functions of existing housing authorities and shall be adequately capitalised by the federal government. The agency will have a three-fold mandate to (i) grant low interest rate mortgages directly; (ii) guarantee qualified mortgages issued by banks; and (iii) purchase mortgages from private banks. The guaranteeing and purchasing of mortgages will incentivise banks towards mortgage lending and will deepen the secondary mortgage market. Banks will also be encouraged to engage much more in the provision of affordable consumer loans for automobiles and expensive domestic appliances. A certain portion of bank lending must be earmarked for the consumer. All noncompliant banks will pay a penalty to government. Compliant banks will be entitled to tax breaks and credits as well as favourable treatment by the CBN regarding inter-bank transactions and other monetary policy ratios.
Lets tell you about Tinubu’s policy on Home Ownership. Home ownership is a source of prosperity, social stability and individual pride. A vibrant residential construction industry is essential to a healthy modern economy. In conjunction with the National Assembly and State Governments, we will review and revise the Land Use Act. We need to streamline and rationalise the land conveyance process. In this way, we lower costs and delays and promote more efficient use of land. This more efficient allocation will bolster the housing industry and lower costs for investors and consumers. Working with state governments, we will provide credits and incentives to developers of housing projects that set aside a significant portion of their projects to affordable housing. With the support of State and Local Governments we aim to establish and implement a new social housing policy whose objective shall be to provide pathways for the poorest Nigerians to climb onto the housing ladder. We will establish a coherent federal program to provide eligible and meritorious civil servants with federal payment guarantees for fixed-rate, long term mortgages for their homes”.
Send Us News, Gist, more... to citypeopleng@gmail.com | Twitter: @CitypeopleMagz
