•Say cement cheaper in Ghana than Nigeria
Real estate developers have called on the federal and state governments to introduce diverse forms of subsidy as a way of stimulating investment in various aspects of the real sector, saying it was one way to tackle the affordable housing challenge in the country.
The developers who spoke in separate interviews with Daily Trust maintained that the best way for the government to tackle housing deficit in the country was for it to provide the best of incentives to developers.
The President of Real Estate Developers Association of Nigeria (REDAN), Surv. Ugochukwu Chime, said subsidy for the real sector, like the government had done for some other sectors, was one of the things estate developers were looking at so as to be able to make the sector more streamlined and efficient.
Surv. Chime said, “Globally, government does not allow the affordable housing segment of the real estate sector to be thrown open to market forces. There are always subsidies, and you can give subsidy in diverse ways. You can give subsidy, like if your turnover as a company is less than N20m, you don’t pay tax. That is a way of stimulating investment and activity in various parts of the sector.”
Speaking on the reasons why affordable housing in the country is yet to be achieved, Surv. Chime said the challenges were mostly around land administration, as the country was still unable to manage its land transaction cost and transaction time.
He added that, “That is why you can build a housing and it will take you two years in some states to be able to get title; that is very terrible.”
Speaking further, Chime said the authorities needed to computerise some of the records so that the searches and the issue of double allocation and double titling would end.
He further explained that, “When you talk about affordable housing, it depends on the input elements. If you want affordable housing like the Federal Mortgage Bank of Nigeria (FMBN) is able to do by giving affordable interest rate of 10 per cent, then we’ll be able to talk to some of the people who want to own houses. Can they lower the square meterage of the house they are looking for? An average civil servant on Level 8 shouldn’t be looking for 100 square-meter of housing. So, all of us have to think affordable so that when we join all these inputs together it will make for an affordable housing.
“We are looking at all the transaction processes like reducing the land transaction time and cost, the cost of buying cement in Ghana is cheaper than Nigeria; that ought not to be the case.”
The President of the Nigeria Institution of Estate Surveyors and Valuers (NIESV), Sir. Rowland Abonta, said housing was the greatest crisis facing the country.
Sir Abonta said, “The crises facing the real estate industry in Nigeria are numerous for us to start recounting one by one, but the greatest of the crises is the housing crisis that we have today. The growing number of people that live under bridges; that roam about the streets and have nowhere to retire to, particularly in a major cities like Abuja, is a big challenge and crisis. It is a crisis because these are the same people that commit the kind of crimes we see around Abuja now; you can’t drive so late in the night and have reason to break anywhere without being molested, attacked or robbed. So, it’s a crisis and a nation which does not care for the way its people live is particularly going to have many more crises.”
He said once the country was able to solve its housing provision problem, some of the problems he highlighted would end naturally.
Also speaking on the matter, a foremost property developer and Chairman of Trio Nominees Ltd., Mr. Hakeem Ogunniran, said, “I have always maintained the point that if we’re to tackle the deficit, then government must incentivise developers. You have to provide land at affordable rate and you have to provide primary infrastructure, then developers can source the funds and deliver. But if I as a developer have to buy my land in the open market, source for fund in the open market and do my infrastructure in the normal way, it’s difficult to deliver what they call affordable housing.”
He said, “Land is too expensive, and likewise the cost of perfection of title. Cost of fund is too high. The available funds that are in the market, the tenors are too short, the rates are too high. So, for a real estate developer, it is a challenge, and also because as an asset class in real estate you are always competing against other asset classes, investors are rational, they look for where to optimise their investment. So when you pitch your real estate against others, it is always a challenge.”
On what state governments should do to ameliorate the problem faced by estate developers, Ogunniran said, “I think state governors have a major role to play; as we know that Section 1 of the Land Use Act vests all land within the territory of each state on the governors. But they hold the land in trust, they must understand that. What we have seen is that most state governors have upturned the regulations into revenue generation and that has not worked very well, particularly in the area of affordable housing.”
On his part, the convener of Abuja International Housing Show, Mr. Festus Adebayo, called on the federal and state governments to provide incentives in areas of access to land, infrastructure and tax rebates that would attract more investors to the delivery of affordable housing.
