The Nigerian real estate market has been a major force propelling the country’s economy beyond heights, providing job opportunities and generating revenue for decades. The increasing housing demand, urbanization and foreign investment has grown the sector exponentially.
However, the market faces several challenges hindering its growth and development, these challenges have deprived the country of reaping the full potentials of real estate.
This article will discuss some of these challenges and possible solutions.
Challenges:
- Land Acquisition: The process of land acquisition in Nigeria is slow, complicated, and it is quite common for individuals to purchase a land that is either not legally owned by the seller or already fraudulently sold to multiple people. The land use act of 1978 further complicates the issue as all land in Nigeria is vested in the government, therefore, individuals can only obtain rights to occupy and use lands after paying appropriate fees.
- Lack of Funding: Unarguably the biggest issues faced by investors and developers. There is limited to no access to external funding thus making it difficult to finance projects. Loans and mortgages options are tough due to high-interest rates and stringent lending requirements.
- Inadequate Infrastructure: This is another issue the Nigerian real estate market is saddled with. Access roads, water supply, and electricity are not readily-available in many areas, making it difficult for developers to build houses and for people to access the houses once built. This lack of infrastructure also affects the value of properties and causes price inflation making it difficult for investors to buy properties at reasonable amounts.
Recommended Solutions:
- Land Reforms: The 1978 land use act should be amended to cater for the present realities of the market. The Nigerian government should carry out land reforms to make land acquisition more accessible and affordable. Also, all governmental land agencies and officials should be checked for corruption and closely supervised to enable land registration processes to be more straightforward and transparent.
- Funding: An effective financing mechanism and policies must be put in place by the government to enable more people to have easy access to low interest funds for property acquisition.
- Infrastructure: Electricity, water supply schools, good road network and commercial centres are basic in a favourable environment. The government must invest in infrastructure development to attract investment into the real estate sector and make development more affordable. This will not only improve the value of properties but also ensure the influx of capital into the nation’s economy.
Away from the challenges, the real estate sector is a promising market. With accelerated pace of infrastructure developments and right policies from various stakeholders. The sector will unlock immeasurable potentials yet to be tapped.
