CategoriesReal Estate

REVITALIZING NIGERIA’S REAL ESTATE DEAD CAPITAL

Hernando de Soto Polar, a Peruvian economist, was the first person to use the term “dead capital. These dead capital or assets needs to be unlocked to get the best out of its value. “Freeing up dead assets is releasing the potential of assets that are not currently yielding any returns. There are so many abandoned assets in Nigeria that the total value could reach $900 billion. The worth of the federal government’s abandoned properties is estimated to be somewhere around N230 billion, as stated by the Nigerian Institute of builders. Some of these dead assets include refineries that are not being utilized, so the country is not receiving a return on its investment. Other examples of such assets include the NITEL Building secretariat in Ikoyi, the national assembly complex at Tafawa Balewa square, and the Nigeria social insurance trust fund along the Lagos Badagary expressway, among others. When it comes to dead assets, the real estate market is affected by it because of its poor performance and lack of revenue which could have accumulated value/income if put into use.

National theatre undergoing $100m renovation renamed, to host UN event in November – Nigeria Transport Hub

People have the ability to borrow money against their properties in order to launch businesses if the real estate market is doing well. If they can be put to use, dead assets have the potential to become live assets. However, the existence of these dead assets presents an economic challenge because it makes it more difficult for the real estate market to flourish. The ability of individuals to trade assets is necessary for it to function properly. Before the developers can invest, they need to ensure that they have clear title to the land, and the buyer also needs to ensure that they will have an easy time transferring the property to them. The biggest problems with dead assets are not not having real estate titles, and not being able to get bank loans to invest in other things. Land is the ideal area to tax and the best place to develop a tax base from the perspective of the government trying to raise more tax revenue. The encouraging news is that the nation has begun the process of converting its dead assets into live assets. There is construction going on at a few of the refineries.

Nigeria has untapped potential in the real estate sector which can be revived especially with issues of unregistered land and dead assets.

With a big bottleneck slowing down the growth of the mortgage industry, the creation of wealth, and the overall growth of the economy, we think that unlocking dead assets and tapping into their potential will be a big step forward for the growth of the real estate sector. Hence, we recommend;

  • A comprehensive reform of the land tenure system to address, among other things, the time-consuming procedure of obtaining a Certificate of Occupancy.
  • Mortgage financing should be backed by special and revolving funds, and a legal framework should be set up to allow mortgage transactions.
  • Implement an electronic title registry for storage, retrieval, and quick verification of such titles to streamline operations and hasten the issue of title papers. Also, a new technology called blockchain can be used for title registry.
CategoriesReal Estate

UNIFIED EXCHANGE RATE AND ITS BENEFIT TO THE NIGERIAN REAL ESTATE SECTOR

The Central Bank of Nigeria (CBN) has been seeking, but to no avail, to direct scarce foreign funds into the highest-value uses. This, however, has been counterproductive on the nation. As a consequence of the Central Bank of Nigeria’s (CBN) policy, which includes limitations on FX trading, importers have been forced to acquire dollars at a higher value in order to bring the item/commodity into Nigeria. This is because the local supply is insufficient to fulfill demand. The foreign exchange market is distorted as a result of this, making it difficult to conduct business in certain industries. For instance, in the real estate sector, the majority of value added occurs in Nigeria say 70 -85%; however, you will still need to import some components for manufacturing, which developers/contractors or other members of the value chain are unable to do. This is because they do not have systematic way to access foreign exchange. If there was a standard exchange rate, conducting business in the real estate market would be less complicated. Concerns that have been raised in relation to the unpredictability of the naira may be alleviated if Nigeria maintained a stable foreign currency rate.

The following is a list of some of the benefits that come with having only one exchange rate.

  • It would make it simpler for Nigerians to access markets around the world.
  • It would boost the competitiveness of Nigerian industries by given then a to sell their goods and services with less restrictions on a global scale.
  • It would help to maintain the stability of the Naira, which is now in a weak position.
  • In addition to this, it provides Nigeria with access to a broader market.
  • Also, freer trade among Nigerians is one factor that could contribute to the country’s overall economic expansion.

The real estate industry is the most significant part of the economy. It not only helps individuals move out of poverty but also produces jobs. When the housing market does well, the rest of the economy tends to do well as a whole as well. It is absolutely necessary for the industry as a whole to band together and do what is necessary in order to advance the sector.

CategoriesReal Estate

SDGs ARE ESSENTIAL FOR REAL ESTATE DEVELOPMENT

The Gross Domestic Product is an intangible quantity that does not directly correlate to the well-being of humans. As an illustration, Nigeria’s gross domestic product grew by 6.22 percent in the year 2014. Using the Sustainable Development Goals as a lens for development in order to achieve economic success. The United Nations’ 17 Sustainable Development Goals (SDG) framework can contribute to the economic success of both the population as a whole and the country as a whole.

Below is the list of the 17 SDGs:

1: No Poverty

2: Zero Hunger

3: Good Health and Well-being

4: Quality Education

5: Gender Equality

6: Clean Water and Sanitation

7: Affordable and Clean Energy

8: Decent Work and Economic Growth

9: Industry, Innovation and Infrastructure

10: Reduced Inequality

11: Sustainable Cities and Communities

12: Responsible Consumption and Production

13: Climate Action

14: Life Below Water

15: Life on Land

16: Peace and Justice Strong Institutions

17: Partnerships to achieve the Goal

 

It is necessary to evaluate GDP, but it is equally important to measure the Sustainable Development Goals (SDG). Some of these Sustainable Development Goals (SDGs), such as having sustainable cities, clean water and sanitation, and decent work that contributes to economic growth, are vital for real estate. The part that the industry plays in the process of job creation, for instance when developing residential and commercial real estate. When it comes to real estate, responsible consumption and production means taking a look at the way homes are constructed to determine if they are suitable for our climate. When viewed through the lens of SDG, the importance of clean energy that is both affordable and accessible also applies to the real estate industry. What kind of power supply does the dwelling make use of? When thinking of renewable energy, solar power immediately comes to mind. If we are going to be successful in achieving these Sustainable Development Goals (SDGs), the real estate industry must be at the core of it all and must play a significant role in Nigeria.

 

CategoriesReal Estate

NIGERIA NEEDS TO FIND ITS UNIQUE DEVELOPMENT PATH FOR REAL ESTATE SUCCESS

Real estate is the sector of the economy in Nigeria that is most critical to the country’s overall prosperity. The world’s largest asset class is comprised of real estate properties. Real estate accounts for around two-thirds of the world’s total assets. Everyone requires a location to call home, and everyone requires a place of employment. In the world of covids, the location of one’s home and place of employment can be the same. In any economy, real estate is a major driver of economic activity in a favorable direction. When someone acquires a property, they will need to purchase furnishings for the home. Building real estate involves the sourcing of local materials, which offers employment opportunities. It is a significant sector of the economy that is essential for Nigeria’s continued development. In spite of the challenges that have been present in the real estate industry over the past two to three years, such as title problems, difficulties in gaining access to mortgages, and construction problems, we have since witnessed an extraordinary amount of real estate activities all over the country.

Despite the fact that there weren’t many activities in the sector four to five years ago, A study that was published by Lancet found that Nigeria is expected to have the world’s second-highest population by the year 2100. People are one of the most essential forces that drive the real estate market. The question “how many people are there in a country?” is an essential one to investigate. In Nigeria, the demand for real estate has been steadily growing over the course of the past several years.

In this piece, we will highlight eight different development paths that can lead to economic success in the real estate market in Nigeria.

 

  • Facilitate the expansion of service-based exports
  • An atmosphere that is more favorable to business
  • Tapping into the potential of the global diaspora
  • Low capital formation for investment
  • Development growth on a national scale
  • Transition from the informal to the formal sector
  • Bringing dormant assets back to life
  • Moving away from focusing on GDP and toward focusing on SDGs

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