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According to Business Day, the Pison Housing Company has launched the Roland Igbinoba House Price Index (RI), a statistic designed to capture changes in the movement of residential property prices in major cities in Nigeria.
Kehinde Ogundimu, executive director/chief financial officer, Nigeria Mortgage Refinance Company (NMRC), told participants yesterday at the launch of the RI in the main auditorium of BusinessDay Media in Apapa, Lagos, that the index would help housing consumers to make more informed decisions about their house purchase decisions.
Analysts familiar with the Nigerian housing sector say that it is estimated to have investment opportunity, at the various levels of the value chain, of up to N56 trillion. Some category of investors shun the sector because of the present ‘brick and mortar’ nature, preferring to stake their money in more liquid investment instruments such as bonds and equity stock of companies.
“In addition, the index will help to attract the interest of sophisticated investors and drive funds to the sector,” Ogundimu said at the launch, saying, “Customers will truly be king in the real estate sector. Properties will become more affordable. Customers will have information to decide what to buy and who to buy from.”
The maiden issue of the RI covers the metropolitan areas in Lagos and Abuja, but subsequent editions will extend coverage to other prominent cities in Nigeria. The RI took the first quarter of 2016 as its base year; so the index for any particular year will be the ratio of the weighted average house price for that year and the weighted average price for the base year.
Presenting the index, Roland Igbinoba, CEO, Pison Housing Company, said in a market system, the price of housing should reflect both its relative costs of production and relative benefits to purchasers, noting that this should happen whether the latter intend to use them for residential or commercial purposes.
Igbinoba said a house price index (HPI) is a tool that measures changes in single-family home prices across a designated market, assisting different professionals to take critical decisions.
“Economists and Financial Analysts also use House Price Indices to monitor long-term trends in house prices,” Igbinoba said.
Lekki Gardens Estate, an independent real estate company focusing on property development, management, marketing and sale of real estate products and services, partnered Pison in the development of the RI.
Richard Nynong, CEO, Lekki Gardens Estate, said they partnered with Pison because, among other reasons previously outlined, “the RI is consistent with the vision of the real estate company.
“In line with the vision of Lekki Gardens, the index will help real estate companies to help the customers, so that they don’t take advantage of the customers but help the customers do better.”
An analysis of the data obtained in the course of developing RI revealed that house prices in Ikoyi and Victoria Island, highbrow areas where most buildings are constructed with imported materials, maintained an upward trend despite the recession that has afflicted the Nigerian economy.
Source: Business Day