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‘Why Nigerians spend 60% of income on rent’

Experts in the real estate sector have called for the decentralisation of development in order to tackle the problem of rural-urban migration which appears to…

Experts in the real estate sector have called for the decentralisation of development in order to tackle the problem of rural-urban migration which appears to be exacerbating the housing crisis in Nigeria.

The experts also said there was a need to institutionalise the real estate sector for it to realise its potential thereby solving the problem of Nigerians using 60 per cent of their income for rent.

They said a “disjointed” or fragmented industry was not able to benefit the players, even as they called for decentralisation of development to reduce pressure on certain markets like Lagos, Abuja and Port Harcourt which were facing serious migration crises.

Stakeholders, including developers, investors, corporate organisations, hospitality and retail players, specialised asset developers, and financial players spoke at the eighth edition of the West Africa Property Investment (WAPI) Summit 2022 held in Lagos with the theme: “New Frontiers in the New Normal”.

The Legal and Compliance Manager of Pennek Nigeria Limited, Michael Obiaju, said the real estate industry had a huge economic value inherent in it which would be fully tapped when institutionalised.

He urged the government to lessen the pressure of urban migration in Lagos, Abuja and Port Harcourt by setting policies that would expand development in other parts of the country.

He said, “So, speaking of opportunities here, the challenge Nigeria is having is that the opportunities in real estate are centered on certain demographic zones.

“So you talk of Lagos, Abuja and Port-Harcourt, there is need for the government to come up with policies to decentralise these developments to other parts of the country so that there’s less pressure on the urban region of Nigeria, and the urban migration will not have the kind of pressure its currently having. You see that it takes about 60 per cent of an average Nigerian income to pay for rent, which ought not to be because development is centered on certain spots, there’s migration, there’s pressure on a particular spot.”

The Head, Real Estate Finance, Stanbic IBTC Capital Limited, Mr Tola Akinhanmi, in an interview, warned that a disjointed industry would become a clog in its wheel of progress.

He said, “I think institutionalising plays a key role and it is not just the real estate market. When an industry is fragmented, where and what’s more, there are different players, they’re not able to harness the opportunity and attract capital.

“We are talking about significant capital, both from our local market and offshore. That’s why it’s important that the opaqueness that you’ll find in the industry is removed and part of it is what we’re doing now.

“Releasing information for our people, stakeholders, experts for thriving solutions so that we can grow the market, rate the right framework, right information that would enable investors, different players to support investment in the asset and that is a critical thing.”