Insolvency Hits Real Estate Sector

Insolvency is hitting the real estate market even as real estate operators and construction business experts have decried the poor performance of the sector.

The experts task the federal government to take urgent steps by paying adequate attention to the sector, noting that, housing subscribers were finding it difficult to pay rents and service their mortgage payment plan.

Indeed, these are trying times for different sectors across the Nigerian economy and the nation’s real estate segment is not insulated from the aftereffects of the COVID-19 pandemic.

To this end, some operators and stakeholders have expressed their fears that if the government does not intervene, more real estate companies may be forced to shut their operations.

Confirming the development of on behalf of operators , the managing director, Infinity Trust Mortgage Bank Plc, Dr. Olabanjo Obaleye, explained that, many companies affected by the pandemic had folded up, as housing subscribers were finding it difficult to service their Mortgage payment.

He said: “there are two companies that have just collapsed due to the inability of the owners to get foreign exchange for the importation of raw materials.”

On government support and intervention, he noted that, “nothing visible and tangible have been seen. We have read so many pronouncements on that from the government but we haven’t receive any palliative in that respect. We have made proposals to government through our relevant authority but there’s need for certain funds to be set aside for this.”

Also, a real estate expert, Gbenga Ismail, explained that the impact of Covid-19 in real estate would be felt by stakeholders and property owners because of the tenancy/rent structure of the sector.

Unlike what is obtainable in other climes like the United Kingdom (UK) and the United States of America, where rents are renewed on a monthly or quarterly basis, Nigerians will feel the pressure now, as rents are paid in one or two years advance.