“Is the valuation of land and properties across the country reflective of economic realities? This was the poser for estate surveyors and valuers at the inauguration of the reconstituted Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON) in Abuja by the Minister of Power, Works and Housing, Mr. Babatunde Fashola.”- The Nation
“For me, I think the most important lessons that I like to share at this inauguration is to pose the question to you whether the current land evaluation system and values are consistent with the realities of our economy. Are these values consistent with reality? Why are we not seeing rates and rents and values drop? Why are we having many houses unoccupied where people are looking for accommodation? You, as experts, must answer that question,” Fashola again asked the professionals at the gathering.
According to the former Lagos State governor, in a very challenging economy where cash is tight, can it be said that the market value of properties are really responding appropriately?
The minister noted that since the global economy recessed or slowed, property owners in some other climes are offering discounts on their properties to ensure optimum occupancy. He, therefore, wondered why the reverse was the case in Nigeria, whose economy is being greatly challenged by tight capital.
“It has always been the argument of property owners in the country that the properties were valued higher so they could have an “impact on percentages and commissions”. But I urged you as professionals and practitioners in the domestic property market to take a cue from your counterparts and other property sellers in the United Kingdom, who, because of BREXIT, began to offer discounts on properties to the citizens,” he advised, urging the practitioners to learn from the stock market and how markets react to policies.
The minister explained that many years ago the domestic Stock Market was immune to policies, but today Nigeria’s Stock Exchange ranks with some of the best in the world because it reflects the realities of the country’s economy in many respects.
He said one of the areas where Nigeria’s Ease of Doing Business ranking could improve was in the area of real estate valuation, “especially how to develop a harmonised code of charges”.
“We had this problem back at state level where we found out that we were charging about 10 per cent gross on fees and taxes while other countries close to us were charging one and two per cent. But the truth was that the values were not real,”he said.
He, therefore, urged the the new board of ESVARBON to ensure that the disparity between the country’s land evaluation system and the current economic realities are reconciled. Besides, the estate valuers were also advised to develop an open evaluation for different parts of the country as well as evolve means of making estate valuation simple enough and responsive to the man on the street.
He said other countries have evolved property calculators with which it only takes indexing a property owner’s location and that of his property to have a fair value of what his asset is worth.
“So, I will like to see, therefore, that as you take up the mantle of leadership today after inauguration, these are issues that I think you should put into the front burner agenda in terms of how you regulate the practice and also the quality of people that you admit to the practice,” Fashola urged regretting that customer is clearly not the king, even with his money, in the domestic real estate transactions.
He nonetheless extolled the virtues of the profession, saying that they are of significant importance to the economic growth of a nation. This, he said, is because they undertake the business of how land is turned from being a dormant asset into a valuable asset; thereby putting value on land.
“This is why the Ministry of Power, Works, and Housing employs a number of estate valuers, considering that whether we are building new roads and there is a need to acquire Right-of-Way, or sometimes have to pay compensations, estate valuers are needed to value the land and properties involved.
“For instance, some estate valuers have been incorporated into the Power sector for the development of the Mambila Hydro Power Dam. This is in the area of assessing the land that is needed and ultimately quantifying same for compensation to be paid. Others have also been employed for new Transmission Company of Nigeria (TCN) where the Ministry has to acquire Right-of-Way for its transmission lines.
“All of those ,who are involved in one form of enterprise or the other must first of all appreciate the value of land as a major capital formation asset; whether it is for small businesses, large corporations, markets or motor parks. I can’t really think of a business that one wants to undertake where land is not a critical part whether it is just to own a small office or a small kiosk where you can sell very basic things, even to roast corn,” Fashola explained.
Source: The Nation