More Search Options
We found 0 results. View results
Your search results

Olashore Calls for Urgent Banking Reforms to Grow Real Estate Market

Posted by Nigerian Property Market on June 23, 2015
0

Fadekemi Ajakaiye The Chief Executive Officer of Lead Capital Plc, and Chairman Board of Trustees of Olashore International School Prince Abimbola Olashore, has pointed out that to unlock opportunities in Nigeria’s Real Estate market, the financial sector has to be reformed, fair banking practices have to be adopted and better supervision has to be focused on. This will also stabilise prices in the long run and help to utilize the 17 million deficit in the real estate market which represents a huge opportunity.

He stated this during a paper presentation on “Unlocking the Opportunities in the Nigerian Residential Real Estate market: The Investor’s Perspective” at a forum in Lagos.

According to him, the opportunities inherent in the sector lies in the fact that there’s an increasing population growth in which more than 80 per cent of Nigerians live in settlements and demand for housing far exceeds the supply.

His words “Opportunities in the Real Estate Financing can be seen from the Increasing population growth, rapid urbanization and the growth of the middle class have spurred demand for real estate. With the level of housing at only 2 dwelling units per thousand people compared to a rate of 8-10 dwelling units per thousand people as recommended by the United Nations. Nigeria has a population growth rate of 3% and a rural-urban migration rate of 5 per cent per annum. The rate of housing demand continues to exceed supply, presenting ample opportunities for growth and development”.

Viewing the investment perspective of the Real Estate, he portrayed Africa and the Emerging market as being field with opportunities for healthy returns due to their increasing growth fundamentals, owing to the fact that the Eurozone crisis have slowed down growth and weakened advanced economies from their strong position as an investment destination, thus making investors focus on promising markets, such as Africa, and the fact that Africa’s cities are experiencing an influx of residents in search of work and better standards of Living.

He confirmed that, “Africa’s growth presents investment opportunities in key sectors given the sheer size of the market and the continent’s potential. By 2030, more than 50% of Africans will be living in cities. The key drivers in Africa Real Estate are political stability, macro-economic reforms, rapid urbanization, and growing middle class.” Likewise, he sees the challenges inherent to be Land registrations, access to finance, lack of infrastructure, importation of raw-materials, and affordability.

He pointed out that more than 80% of the Nigerian population live in settlements that are unplanned with poor living conditions, approximately 85% of the urban population live in rented accommodation – spending over 40% of their income. Nigeria which has a population of about 170 million and vast oil wealth continues to experience problems in meeting a housing deficit modestly estimated at 14 to 16 million units, and Mortgage loans and advances stand at 0.5% to GDP in contrast to 30-40% in emerging economies and 60-80% in advanced economies. Private developers will continue to be of strategic importance.

The Forum had various Captains of the Industry speak on how opportunities could be unlocked in the Real Estate sector through the banker’s perspective, investor’s perspective, infrastructural banker’s perspective, media perspective, pension manager’s perspective and Fund Manger’s perspective.

The Managing Director of FSDH Merchant Bank, Mr Rilwan Belo-Osagie, who spoke from the Banker’s perspective on ‘Financing Real Estate deals’ stated that one of the peculiarities in the industry is that there is a large demand for housing in Nigeria and as such the Real Estate business is growing fast. “The key issue in financing real estate is achieving bankability, and dealing with weak value chains which ranges from property registration and taxes, Infrastructures, high interest rates demand, and access to long term finances. Unless we get more mortgages in Nigeria, developing the residential real estate among other real estates will be difficult.

While trying to unlock real estate opportunities from the media perspective, the Publisher of Business Day Paper, Mr Frank Aigbogun reiterated that more clarity is required on the part of those developing and buying houses, in order to understand the dynamics of sector, what drives it, and how it is compared with those abroad. According to him all these will aid reporting of the sector better.

Leave a Reply

Your email address will not be published.

  • Advanced Search

    More Search Options
  • Change Your Currency

Compare Listings