Notwithstanding the poor performance of the real estate sector last year, occasioned by the negative impact of the corona-virus pandemic, operators are optimistic that there could be an early rebound in 2021 if government lives up to its obligations.
For a sector hugely dependent on the economic dynamics, experts were cautiously optimistic that real estate will recover in the first quarter.
The optimism stems from better understanding of the covid-19 virus coupled with the positive moves by the Central Bank Nigeria in foreign exchange regulation, the recent World Bank report of possible 1.1% growth in the nation’s economy and the slight increase in oil price.
They also want policy makers to move decisively to tame the pandemic and implement investment-enhancing reforms.
According to the Frist Vice President, Nigerian Institute of Architects (NIA), Enyi Ben-Eboh, the construction industry is normally one of the worst hit when there’s a downturn in the economy because priority is often diverted to subsistence sectors such as food, information technology and medicines.
However, with a better understanding of the covid-19 virus and availability various vaccines to tackle its spread,he said, life can begin to gradually return to normal and the economy can also start improving.
Eboh was also optimistic that the prices of basic construction materials like cement and a few others that spiralled out of the reach of most, especially in Q4 of 2020, will return to what they were in Q1 and Q2.
“This may be wishful thinking but all things being equal, 2021 will hopefully herald the gradual return to activities in the construction sector to near pre-pandemic levels. The general outlook is however that of a wait and see position,” he said.
The whole economy, he said, is down, despite what government has said. Idudu explained that as many people find it difficult to feed because the prices of food have skyrocketed, they are debarred from thinking of owning a property or going into property investment.
He urged policy change based on previous advice and ensure a general improvement in the economy pattern to reflect the reality.
According to him, “Government should move away from its control on land, and ensure that land ownership is free so that people can use their lands to borrow money and do businesses. “Government ownership on land won’t help. Where we are on the ease of doing business in the world is a disgrace. We are at the bottom.
“I don’t foresee any good news. The economy is down. The property industry is the one that would only improve when there is a general growth. People will generally not invest in property, which has a long gestation during difficult times,” he said.
Idudu, a former Chief Executive Officer of Knight Frank, an international firm of estate surveyors, valuers and chartered surveyors, observed that the property sector in Nigeria doesn’t follow the internationally established pattern.
He said: “for instance, everywhere in the world you only move into property through mortgage but in Nigeria, people move into properties by stealing from the government and other people’s money.
“Virtually all politicians in Nigeria go into politics because of self interest and when they are in position where the treasury is at their beck and call, they build massive blocks of houses without borrowing a kobo.
“These are not normal things. You go into estates in Nigeria where not a single property is occupied because those who built them have not borrowed to build. If you borrow to build, you cannot hold your property empty and unoccupied, the lender would pursue you but they don’t care because the money are most likely stolen,” he said.
Also, Nigeria’s leading real estate mogul and Managing Director of Delta Mega Trend, promoter of Plantation City, Warri, Mr. Sam Ogrih, said the real estate sector will rebound with the right products in the market.
He stressed that the reality on the ground now is that, people just want to have a sizeable property unlike the days when they want to build mansions.
“People now desire compact but functional houses that is what is going to drive the sector. But these are going to be budget driven and that is what will happen this year”, he said.
Ogrih urged government to focus on creating enabling environment and not to build houses for individuals because the plan to build houses of N3 million is not achievable with the price of cement at N4000 and government’s lack of control over price.
“Government should come out with policy that will allow workers to have access or qualify for mortgages, not just civil servant, a kind of mortgage facility.
The recent government’s policy on data like the compulsory requirement of National Identification Number (NIN) for the registration of phones will be a plus because one of the major challenges is ability to trace or get someone who obtains a loan.
“ So, with NIN, credit defaulters could easily be checked, unlike when there was no data. Now there is Banks Verification Number (BVN) linked to people’s banks and NIN to their phones. Besides, if you acquire a property you are now linked to it,” he added.
The Group Managing Director, Sparklight Group, a Lagos based property development company, Mr. Toyin Adeyinka said government’s policy on affordable and low income housing for Nigerians which it intends to use as a vehicle to address the economic recession would go a long way to create jobs for professionals and improve the sector in 2021.
He cautioned that Covid-19 is still around and might be a drag for the built environment quick recovery.
“Nevertheless, developers should be doing more in terms of affordable housing in 2021 than they did in 2020 because of government’s policy. The Federal Mortgage Bank of Nigeria (FMBN) has been more focused on issue of cooperative loans, that should help too,” he stated.
Adeyinka, however, urged government to come up with strong policies on the control of imported building materials and the use of local building materials such as bricks, doors, tiles and windows .
“Whatever we can produce, we shouldn’t import. This should start with government’s projects. In Nigeria we make better rustic bricks, so government should come up with policies to protect institutions that produce such materials. We should also look at other design methods that consume low cement quantity because of the prices, which have gone up,” he added.