Fresh facts have emerged that the built environment is still battling to contend with over N2billion losses recorded during two years of Nigeria’s economic recession.
Findings indicated that the losses emerged from underpriced and vacant properties mostly within Abuja, Lagos and Port Harcourt. It was also revealed that the real estate sector is yet to recover from the loss compared to five years ago when the business boomed astronomically.
This is purely linked to the 30 percent decline in payment of tenancy fees witnessed in the Federal Capital Territory (FCT). It was also discovered that the increased number of vacant houses, led to a drop in rental value and rising number of homeless people, who are mostly spotted sleeping under the bridges or motor parks. A real estate developer, Arc Adewunmi Towolawi Okupe, lamented that the business is yet to pick up compared to five years ago.
He pointed out that the sector lost billions of naira during the period under review even as he regretted the absence of liquidity in the system.
According to him, “During the 2 years, I actually did not have any substantial loss because I sensed where the indices were going so I did not make any fresh investments”.
Okupe said though goods and services are readily available, affordability level and cash flow of customers is still very low. He noted that the federal government’s intervention in recent years is gaining momentum, adding that the zero equity contribution for loans of N5million and 10 percent contribution for loans ranging from N5 to N15 million by contributors to the National Housing Fund (NHF) is a laudable achievement.
The architect enjoined governments to fix grey areas militating against housing demand and supply in the country such as land use act, provision of infrastructure, high cost of building materials and dearth of skilled labour in the built environment.
An estate surveyor who spoke on condition of anonymity argued that the loss exceeded N3 billion, saying that business activities in the sector were almost crippled due to near-absence of cash flow. He noted that the provision of adequate, safe and affordable housing is a fundamental human right, adding that real estate sector is one of the largest employers of labour across the world.
The developer pleaded with the National Assembly to quicken the passage of Land Use Act 1978, Trustee Investment Act 1962, Federal Mortgage Bank of Nigeria (FMBN) Act 1993, Insurance Act 2002 and other laws essential for growth in the sector.
However, at a 2-day workshop on ‘Construction Contracts Best Practices’, organised by the Nigerian Institute of Quantity Surveyors (NIQS) last month, the minister of power, works and housing, Babatunde Fashola stated that Nigeria recovered within one year of economic recession due to heavy investment in the construction and building sectors.
Fashola described the construction sector as one of the most important sectors in any economy saying that apart from generating employment that it has multiplier effects on other sectors.