When Bill Clinton visited Nigeria to unveil the Eko Atlantic Project in Nigeria in 13th February, 2013, he was optimistic about the vest Real Estate opportunities in Nigeria. He didn’t mince words when he said that in less than five years, “people will come to Nigeria to see the Great Wall of Lagos.” According to him the Eko Atlantic project was a bait that would compel investors from all over the world to invest in the country’s Real Estate industry, despite the discouraging factors that curb investment flow into the country. During his speech at the unveiling of the gigantic city the former president of Nigeria, Dr. Goodluck Jonathan, acknowledged that Real Estate, construction and Housing “constitute an important component of GDP.”
Real Estate in Nigeria has been an Oil field long neglected or perhaps unknown. Nigerian, arguably, has the largest Economy in African, with about 170 million people jostling for a survival in the country, it is no longer news that the Real Estate Sector in Nigeria has the potential to lead Nigeria out of the recession she is presently grappling with as a result of the sharp fall in Oil price and economic instability. According to the National Bureau of Statistics, Nigeria’s housing deficit is estimated to be 17 million as of August 2012. According to Knight Frank’s recent Africa Report 2015, African Real Estate Market have being a choose industry for foreign investors. Nigerian’s market is not left out in this unprecedented sour of interest, as the searches for Real Estate opportunities from outside the country has increased from 30% to 45% in just one year.
According to Chuka Uroko of BusinessDay, Real Estate, “being the queen of the various asset class in the market,” has benefited from the encouraging performance of the economy in recent times, “having seen a significant appreciation in the value of prime property, especially land, in highbrow locations.” David Morley, head of real estate at Actis, during his interview with Peter Evans, Acknowledged the huge potentials in the Nigerian Real Estate Industry, in his words, “Nigeria from an international perspective has attracted more interest over the last two or three years”
The benefit of the surge in interest on the Real Estate Industry on the economy is immeasurable, apart from the bumper effect the industry has on the economy and the magnetic effect on foreign firms which seek to invest and to build corporate offices in the country. It is a known fact that with the unpredictable nature of stock exchange, the safest sector to invest in is the Real Estate. There is also the advantage of the reduction on housing deficit, from its current alarming figure to a manageable status. According the former president Goodluck Jonathan, “The sector has extensive backward and forward linkages, and thus can drive job creation for the building materials industry, for artisans such as plumbers, carpenters, and masons, and also for those who specialize in the interior and exterior decoration of buildings.”
Lagos State seems to get all the shine in the real estate market. Apart from Abuja and some other striving States, Chuka Uroko pointed out that, “A recent report on the Lagos real estate market in the third quarter of 2014 compiled by MCO Real Estate Limited—a Lagos-based real estate research and consultancy firm—shows that Eko Atlantic City and Banana Island have shown strong price appreciation of about 22 percent over the past year.” This shows the huge market share Lagos is holding on to. It is, however, important that Lagos Just like the bigger body Called Nigeria have not exceeded its potential, as regards the demands by the real estate market. The 2.5 million housing deficit compared to the over 18 million population in Lagos State affirm the reality of this fact.
With this obvious opportunity in the Real Estate Industry in Nigeria, there are some setbacks that seems to be clogs in the wheel of progress. There is the issue of corruption. Nigeria is the 136 least corrupt nation out of 175 countries. This is according to the 2015 Corruption Perceptions Index reported by Transparency International. This have dissuaded investor, who seems to be keen in investing in the Nigerian market. Peter Evans Reports that “The Jones Lang LaSalle report places the country in the “opaque” category of transparency, meaning Nigeria suffers from elements of corruption, lack of fundamental data and poor environmental sustainability programs when building large-scale properties.” There is a dearth in significant data needed by investors to strategize and plan their venturing into the market. Some other problem bewitching the industry include
- There is not gainsaying that the high cost of construction has also put a strain on the sagacity of the industry, the price of building materials, landed properties, and other cast have also put a strain on the investor’s stay power.
- The limited technological advances in the area of building construction have inevitably slowed down the pace of the industry.
- Lack of funds to execute profitable project is also a pending problem, as must financial institution are too weary by the economy tightness to give loan, however, if they do, the interest rate is overwhelming.
- Government faulty and unstable policies has also been an issue that has mitigated the growth of the industry. The problem of acquiring properties, building permit land grabbing has its own impart. The difficulty of doing business in the country has its share of the blame.
With all these discouraging factor weighting the real Estate industry down, the Federal Government, through the relevant Ministries such as the Ministry of Power, Work and Housing under the anchorship of the former Governor of Lagos State, Mr. Babatunde Raji Fashola, the Ministry of Trade and Investment Mr. Enyinnaya Okechukwu Enelema, have stated their resolve to build a viable Real Estate Industry, Mr. Babatunde Fashola Stateed that his ministry would adopt the flourishing Lagos State Housing Model (LagosHOMS) to cut down the deficit in the Housing sector and to work on the policies of the past administration to establish a Mortgage Schemes to help in providing finance for the housing and construction sector.
The Lagos State Government have been impressive as regards its housing scheme, the private sector have being carried along and encourage to be a catalyst in the public housing sector. With it Public Private Partnership, (PPP) Policy, the state intends to deliver 187,500 affordable housing in the next five years to reduce the deficit in the state.
With outstanding fit of the Eko Atlantic project, there is no doubt that the Nigerian Real Estate Industry is condemned to boom beyond any Positive forecasts. According to the person behind this vision, Former Governor Babatunde Raji Fashola, “While many may see only the civil works and engineering project and the sign of an emerging Eko Atlantic City project, I see much more than that.” The project is the unveiling of the true potential of Nigeria. Eko Altantic project inspired Former President Jonathan to “announced the Federal Government’s plan to build the Centenary City in Abuja and another agenda to develop multiple Aerotropolis’ around the country’s international airports, which would start with Lagos and Abuja.” The Banana Island also compels attention, from this dreams to it manifestation.
In conclusion, with the abundance of middle class citizen in Nigeria, especially in Lagos State, and the increase in wants for facilities, such as a modern Shopping Malls, Cinemas, amusement parks, relaxation center, Health Center, Educational Facilities, Sporting Centers, Housing Estates, etc., should be enough to project and portend the potentials and possibilities imbedded in the Real Estate in Nigeria. it is time for us to embrace the realities and to get involved in the developmental process in the industry.
Photo Credit: https://www.today.ng