WHAT ARE THE ISSUES AND CHALLENGES AFFECTING REAL ESTATE DEVELOPMENT IN NIGERIA
1. MONETARY COSTS:
Someone once said as a joke that you never know the real life until you leave your parents house. In your parents’ house, you do not pay bills, if at all, personal bills, you do not have to worry about where the money for rent is coming or for house maintenance, until you decide to live alone and find out how much houses really cost in Nigeria. Real estate is one of the fastest rising stream of income, everybody wants to go into real estate because of the money involved but many are restricted for so many reasons, the most obvious reason being the cost of houses. Houses are running into so many millions and this cost most times do not even cover furnitures and other house fittings or utility bills and this is a major challenge to the development of real estate.
The rise in the price of most homes in Nigeria especially commercial cities like Lagos, Abuja and Rivers is posing a significant challenge to the country's real estate sector and it is discouraging most Nigerians who intend to venture or invest into real estate. This exorbitant price tag in real estate has also widened the social division between different income earners. There are certain areas where a middle-income earner or a low-income earner cannot afford to rent a home. It is almost like there is a certain type of home for the rich, an average one and one strictly for the poor and this has caused a social division in the society.
2. THE PRESENT ECONOMIC RECESSION:
Another challenge that the real estate sector is facing is the Post-Pandemic economic recession. Nigeria already had a shaky economic sector but it worsened after the global pandemic. Corona virus had a big toll on the Nigerian economy as there was no good flow of money, no money coming in as there was no work done but money being spent out on a regular basis. This financial problem eventually have impacted on the Nigerian economy because there is a limit in the flow of cash in the other sectors.
Till this moment, it has been really hard to effectively bounce back and the if capital market of the country is threatened, then every other sector is threatened. The raising capital for lands, fees, and construction costs has made things even more difficult for estate agents. Also, the rate at which the Naira is depreciating is a major source of concern for all sectors of the Nigerian economy, including real estate.
3. INEFFECTIVE PROPERTY PROTECTION LAWS:
Estate laws are generally not properly implemented in Nigeria, which has resulted in many cases where investors have been deprived of the land they legally purchased.
This is common in developed areas of the country, such as Lagos, and is primarily because of a group of land thiefs known as omo-onile. Omo-oniles are well-known property scammers who threaten and scare property owners with settlement fee tag. They are also commonly found on construction sites where building projects are in progress, where they violently or deceitfully extort land owners.
Also, a particular land can be sold to multiple people and at the end of the day, many of them lose both the land and money if someone else has a better title to the land and this discourages many people from venturing into the business.
WRITTEN BY: CHAMAN LAW FIRM TEAM
TEL: 08065553671, 08024230080