The huge housing deficit in Nigeria requires the synergy of the private sector, government and individuals to solve. The Chief Executive Officer of Africa Property Investment Forum (AFPING), Mr. Kalu Chudi, in this interview with OMIKO AWA explains how government and the private sector can fill the gaps.
The private sector has been playing major roles in the provision of housing, in which ways could government support the initiative?
Government should take a major step in the provision of houses for the people, as it is done abroad. It must come up with policies that could make individuals build their own houses with ease. Mark Zuckerberg is one of the powerful people in the world because his government made things easy for him to do his work. Government should not only regulate, checkmate activities in the sector, but encourage stakeholders. In the United States, you need not to have the whole money in the world to be a developer, once your company is recognised by government you can easily be financed by a bank. But in Nigeria, struggle to raise fund because our banks can’t do much. Developers pick up loans with double digit interest and the projects suffer some setbacks. Real estate business is a social development and government should take the first step.
How can developers enhance safety and standardisation, as well as reduce building collapses in the country?
Project managers should not leave projects half way and also avoid the temptation of using substandard materials. They should always get necessary approvals before commencing work.
How can Nigeria overcome its huge housing deficits?
Government alone cannot solve this problem, which is the reason it has to partner developers. The deficit is not a curse, but an opportunity for investment. We must deploy technology to generate data for the real estate sector to be able to know what is required in the country. The key players must also work together, build a data base for the sector. Some people have the wrong impression that one has to be rich to invest in property, but we demystified this by telling people areas they can invest in. We want people to take a look at the Lekki market; this is the only market that is highly predictable in the country for now. It is an area where one can invest in property and would be sure to get returns over and over again. There are property worth N4million now and in another three years, it could be sold for about N8million.That is how that market is and so for a good number of us, we are looking at how people can take advantage of this opportunity. It is a market that is in high demand.
People must realise that as we get older our expenses will continue to increase. So, we must think of ways of making extra money to augment our normal monthly income. We must learn to have something that will guarantee regular cash flow for us. It is open for all, not necessarily the rich.
Why the focus on Lekki and not any other part of Lagos?
When we look at the statistics and the facts in terms of rental, apartment sale, duplex sales/rental, land sales and others, Lekki market is just the best place to be. Majorly, I believe the wealth of Lagos is moving to a particular region and 70 per cent of the wealth of Lagos will be generated from Lekki. The place has potentials of the Free Trade Zone, international airport and other amenities. I calculated how much would be generated from that zone on a monthly basis and I found out that it will generate about N7trillion, which is more than the 2017 Nigeria budget and if 70 per cent of wealth would be generated from an area, it is good sense that anyone should invest there and expect good returns.
Many Nigerians including, business people, professionals are looking for small size houses, but most of the property in Lekki area are large. Where exactly are the opportunities for investment and how affordable are they?
The market is obviously a unique one. The Lekki Peninsular started from the Victoria Island extension to Ibeju Lekki to the fringes of Epe. Be informed that most of the activities, especially in the cooperate world is carried out in that corridor. One way or the other, many people are moving towards that end because people like to move close to their workplaces. This puts demand on housing and you will notice that developers are now coming up with affordable houses instead of the mansions. Instead of one person sharing one compound, you now have a situation where one plot of land has up to six houses on it. However, it is not the location that is forcing prices up, but demand.
Nigeria is still in recession and there is low purchasing power. Why do you want people to invest?
The best time to always invest is when people are not investing because the opportunities will not always come. It is not in the time of boom that we must only invest. Real estate market never goes on recession. You will always pay your rent; you will not tell your landlord that the country is in a recession because somebody somewhere needs somewhere to lay his/her head. People can pull resources together to invest in real estate and by so doing they become stakeholders. Recession or no recession people must position themselves for opportunities, but not many people are thinking along the line.
How do you source property for people to invest in?
The partnership for investment forum involve the combination of investment company and real estate development company who source for property. Prospective investors have insurance on the deal that will take charge in case of any negligence on the part of the developer for the investor to get back his money. That is how smooth the deal is. It is an opportunity to transit from one state of financial status to a better one.
What impact would your initiative have on the sector?
The impact is going to be massive. People will have opportunities to make money for themselves. Overtime, real estate has been making the banks richer rather than making the people richer. It will give the people opportunity to have capital and not just to buy property. They would be able to earn rental income. We want people to take advantage of this opportunity and transit from the state they are, to where they want to be. In addition, our company is not borrowing to finance our projects. It is leveraging investments, which make it sustainable.
How would you rate the future of the real estate sector?
The future is massive; in fact, we are just beginning. We need serious investment in the sector and there are great opportunities in it.