Published On: Wed, Jan 9th, 2019

2019: How enabling environment can boost private sector housing -Shonubi

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The Vice-President, Nigerian Institute of Quantity Surveyors (NIQS), Mr Olayemi Shonubi, has appealed to the Federal Government to provide an enabling environment for the private sector housing to thrive in 2019. Shonubi made the appeal while speaking with newsmen in Lagos.
He noted that the performance of the sector had been poor and below expectation in 2018, saying that government should allow the private sector to drive the housing construction sector.
According to him, such move would ensure maximum provisions to curb housing deficit in the country.He said all government needed was to provide the enabling environment and other necessities, that would aid the operations of the private housing developers. Shonubi attributed the country housing deficit to lack of full participation of the private sector in housing delivery.
“Government alone cannot provide the needed houses for the country. It needs full participation of the private sector, through a well-programmed Public-Private Partnership (PPP) scheme.
“This implies leaving housing delivery in the hands of the private sector while government provides the necessary conducive environment,” the NIQS chief said. Shonubi was optimistic that the active participation of the private sector in housing delivery would have a positive impact on the country’s housing situation.
He noted that for the PPP programme to yield positive result in addressing the nation housing needs, the government needed to go beyond the provision of land and policy frameworks.
According to him, the government needs to grant incentives to private housing developers.“Examples of such incentives are import duty waivers on building materials, provision of infrastructure and credit facilities through effective mortgage system, tax relief, among others.
“Introduction of realistic building regulations and the removal of restrictive legislation, such as the Land Use Act of 1978, could guarantee a conducive atmosphere for the private sector to operate.”
Shonubi noted that some construction works required lucrative machines too expensive to afford by the local and private operators.
“What makes foreign operators and contractors seem to be more competent is because they have the financial capacity to secure all kinds of expensive machinery that facilitate construction works. “The indigenous private operators need government empowerment to effectively operate.”
Despite being in recession, Nigeria’s real estate sector showed sign of exiting contraction mood in the third quarter of 2018, in what is the second consecutive pointer of a positive trajectory.
Industry experts polled in a BusinessDay survey linked the growth performance reported for the quarter to Nigeria’s economic performance, readjustment in the country’s property market, government and private sector fund injection and the forth coming elections.
At the end of the 9th month of 2018, the real estate sector reported growth of -2.68 percent as against the -3.88 percent growth rate recorded for Q2 and -9.40 percent in Q1 of the same year, figures compiled from the Natinoal Bureau of Statistics (NBS) show.
Olurogba Orimalade, Chairman of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) Lagos State Branch said what is happening in the sector that has impacted its growth rate in Q3 is as a result of the readjustment in the market.
“What has now happened is that a lot of property owners in various sub sectors of the industry have now come up with different solutions, in either renting or selling,” Orimalade told BusinessDay.
He added also that the developers that invested in some of the houses at very high profit margin have now realised that a profit is a profit, “so instead of them keeping their property in the market for a very long time, they now have adjusted their reality. So there is flexibility that is been pushed by market realities.”
Nigeria’s GDP in the third quarter of 2018 grew by 1.81 percent (year-on-year) in real terms in the third quarter of 2018, driven by the non- oil sector.
The growth rate report in the review quarter represents an increase of 0.64 percentage points when compared to the 1.17 percent rate recorded in the third quarter of 2017.
Q3 GDP figures was 0.31 percentage points better than Q2 2018 figures of 1.50 percent. While for the real estate sector, the Q3 figure released by NBS was better than Q2 figures by 1.21 percentage points.
Adeniyi Akinlusi, President of Mortgage Banking Association of Nigeria and Chief Executive of TrustBond Mortgage Bank said Nigeria’s economic growth rubbed off on the real estate sector.

Source: Housing news

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