The President of Real Estate Developers Association of Nigeria (REDAN), Rev Ugochukwu Chime has stated that the current approach to professional practice in the housing development, which is characterised by each professional working largely within the narrow confines of their profession has negative consequences on the development of the real estate industry in Nigeria.
He made this known while speaking at the CEOs Forum of 13th Abuja International Housing Show (AIHS), which held from 23rd to 26th July 2019 at the International Conference Centre, Abuja.
Speaking on ‘Collaboration and Synergy in Real Estate Development: The Way Forward,’ Chime said that ‘’collaboration does not just happen. It cannot come by mere decree or desire. If we all agree that we need to collaborate more in order to serve our clients and humanity in meeting their basic need of a roof over their head, then we must look at ways to achieve the desired end.’’
He said that the lack of collaboration in the industry among other issues are the reason why the country’s housing crisis lingers.
He said; “Nigeria’s current mortgage sector contribution to our GDP is less than 1 per cent. While that of countries like South Africa stand at 20 per cent; Ghana 4 per cent; UK 65 per cent and USA 76 per cent.
“There is an urgent need to create a National Housing Council distinct from the existing National Council on Housing which is domiciled in the Federal Ministry of Housing, and is dedicated to enhance the coordination of activities in of professionals and organisation involved in the supply side of the real estate industry.”
‘’The World Bank estimated that Nigeria’s housing deficit stood at 17 million units as of 2013 (World Bank (2016)). Currently the housing deficit according to FMBN stands at between 17 – 22 million units. The Centre for Affordable Housing Finance in Africa reports that housing production in Nigeria is at approximately 100,000 units per year, while what is needed to bridge the deficit is a minimum of 1,000,000 units per annum housing production.
‘’In terms of mortgage finance, over sixty trillion Naira would be required to address the deficit at an average unit price of three million, five hundred thousand Naira per housing unity. Nigeria’s current mortgage sector contribution to our GDP is less than 1%. While that of countries like South Africa stand at 20%; Ghana 4%; UK 65%; USA 76%. From the CBN data the total number of mortgages in Nigeria is less than 100,000.
‘’Nigeria has a low homeownership rate of 25 percent, lower than that of Indonesia (84%), Kenya (73%), and South Africa (56%). The major issues that continue to affect housing in Nigeria include constraints related to the high cost of securing and registering secure land title, inadequate access to finance, slow administrative procedures, and the high cost of land.
‘’Housing creates jobs and supports inclusive socio-economic growth. In India, each new housing unit generates 1.5 direct and 8 indirect jobs. In South Africa, each housing unit creates 5.62 direct jobs and 2.5 indirect jobs.’’
On the part of REDAN, he said that the association has undertaken to spearhead the advocacy and move to streamline and harmonize the real estate industry so as to use the industry as the bedrock for collaboration massive development, employment generation and inclusive socioeconomic growth, and some of these steps according to him includes, restructuring and involvement of professionals, national real estate data collation and management program(NRE-DCMP), training, endorsement of products and estates, enactment of regulation and more.
Speaking on policy failures, he said that the major challenge with all the policies, initiatives and institution created is the very poor understanding of the transaction dynamics; key stakeholders; value chain interface; lack of political will; very weak linkages; and sustainability of the learning curve improvement. Each policy, he said, is treated as a greenfield project leading to our starting afresh and abandoning critical lessons learnt.
‘’The current economic situation, the impact of technology and global professional trend provide us with two options – collaboration or extinction. This can be considered as a clarion call for all of us in the built-environment sector in this clime to rouse ourselves from the past, see and embrace the future,’’ he advised.
By Ojonugwa Felix Ugboja
