Paucity of funds, inflation hurting real estate industry ~ Prestige Real Estate News

Paucity of funds, high inflationary trend in the economy and exchange rates have been adduced for the seemingly downward trend in the real estate sector.

Despite various efforts by real estate developers to keep the sector bubbling, high cost of building materials and bureaucracy associated with planning/building approval have not helped the situation.

Speaking with the Nigerian Tribune in an interview, the Managing Director/ CEO Fame Oyster & Co. Nigeria, Mr. Olufemi Oyedele, explained that the activities in the real estate industry seemed to be on downward trend because of the paucity of funds in the economy.

According to him, exorbitant prices of building materials have made prices of houses unaffordable to average Nigerian.

“Food prices are on the increase and unemployment rates in states in Nigeria are high. Building materials prices are expensive which make prices of houses to be unaffordable to the common man in Nigeria,” he said.

He pointed out that many abandoned properties litter  the market because of lack of regulation in property development industry in Nigeria.

According to him,  there should be concerted efforts to bring the property developers, financiers including mortgage banks and commercial banks, and buyers together.

He noted that there was lingering housing crisis in Nigeria because the masses could not afford the housing products being produced.

“We have so many imported contents in our building construction,” he said.

Commenting on  the effects of heavy rainfall on most estates on the low-, lying locations and water channels, Oyedele blamed the situation on lack of due diligence by their developers.

He said most of the estates were flooded because they were built below road level.

He said: “Their datums are below the street level and making their site valleys or gulleys, making them susceptible to flooding.

“Their developers fail to do due diligence before commencement of work as it is possible to do site survey and soil test before commencement of construction.”

In the case of  flooded Trademore Estate in Abuja, he pointed out that the mistakes were obviously from the two parties, that is, the government  and the developers.

The way out of the situation, he said was for the two residents’ representatives and government’s representatives to meet and fashion out sustainable solutions.

According to him, demolition is not the best solution to solve the problems of Trademore Estate.

“Professionals are available in Nigeria that can proffer economic solutions that will not put the residents homeless. “Government,  in future, should be more responsible,” Oyedele said.

On what should be the priority of any developer embarking on housing development, the real estate professional said the priority currently should be to provide studio, one and two bedroom apartments with infrastructure like tarred roads and pipe-borne water.

“Other factors to consider in residential estate developments are location to industries or central business districts, nearness to markets and schools, nearness to bus stops and security of their area.

“The average income should determine the capital value of the proposed development,” he added.

• Nigerian Tribune