Connect with us

Housing/Property

Nigeria’s Housing Sector In 2011

Published

on

The housing and property sector, like any other sector of the economy witnessed some challenges, as well as made a level of progress in the year 2011.  The sector offers one of the basic necessities of life (shelter) that every human being desires to have, but it is very unfortunate that the processes that are involved in housing and property development and home ownership are very costly, and which of course have accounted for its rare affordability.

Activities in the year began with various groups and professional bodies making inputs on how to tackle the numerous challenges of the sector, ranging from building collapse to Land Use Act, and means of encouraging Mortgage Institutions to operate with tax exemption.

When the Nigerian Institute of Structural Engineers (NISE) within the period engaged themselves, seeking for preventive measures to structural failures, which effect had been disastrous, and with their resolve to play their roles as professionals in seeking for how to prevent building collapse, the Association of Professional Bodies of Nigeria (APBN) on their part tried to ensure effective and efficient housing delivery and orderly urban development in Nigeria urged government to exempt Primary Mortgage Institutions (PMIs) in the payment of taxes.

One major thing that shook the housing sector in 2011 was the high cost of cement, which is one of the basic raw materials used for construction.

Right from the beginning of year 2011, the price of 50kg bag of cement rose from N1,500 to about N1,900 in January, and continuously rose to between N2,400 and N2,600 per bag in April, 2011 which trend made it difficult for developers and intending home owners to properly carry-on their project execution.

The situation then was almost getting out of hand, as the masses lamented over the high cost of cement, as no proper reason could be given for the skyrocketing price before the federal government’s intervention through the economic team.

As a matter of fact, the constituted Nigeria’s Economic Management Team came on board when cement price had risen to about N3,000 per bag in Lagos area, and was so alarming that construction chiefs called on the economic team to take the issue of production and distribution seriously.

The concern of the economic team then was to tackle the fluctuations in cement prices, as they were mandated to crash the prices so as to make the product available and affordable, thereby boosting the construction industry.

Reacting to the development, the President of the Nigerian Institute of Estate Surveyors and Valuers (NIESV), Mr Bode Adedeji, while urging the economic  team to rise to the challenge of tackling the skyrocketing cement prices, said that the rise in cement prices would further worsen the spate of unemployment.

“The escalating price of cement will compound the myriads of challenges facing the housing and construction sector of the economy.  Further crises in the sector will compound the youths unemployment problem, and the newly constituted Economic Team of Goodluck Jonathan must accord this issue a priority”, he said.

Although the Economic Team impacted on the prices of cement at the first instance, as the price of cement was reduced to pave way for meaningful development in the building sector, but the effort was not sustained, as prices began to change marginally.

Inspite of the various challenges in the year across the country, and these achievements are noticeable in both.

Within the first quarter of 2011, the Federal Mortgage Bank of Nigeria (FMBN) approved the sum of N17.6  billion loan for estate development in the Federal Capital Territory (FCT).

The loan was approved for 32 estate developers to build 6,214 housing units in the FCT, and this amount constituted 25 per cent of the bank’s total loan portfolio at the period of approval.

Mr Gimba Ya’ukumo, the Managing Director of FMBN disclosed that the FCT alone generated N20.7 billion, out of a total of N64.8 billion the bank collected through the National Housing Fund (NHF) scheme as at December 31st 2010.

Also within the period, the federal government commissioned a set of 141 housing units in Irette, Owerri in Imo State capital.  This is part of the Federal Government’s plans to provide new layouts in city centres across the country, as a means of reducing urban congestion.

In 2011, the rate of building collapse was drastically reduced, as compared to previous years. There were just few reports of collapse of building in the year across the country, and this could be possible through awareness campaign by various professional groups and government agencies.

In Rivers State, the demand for housing stock grew within the first quarter of the year, but gradually diminished within the second quarter, particularly for residential accommodation.

Within the later part of the second quarter to the third quarter of the year, some residential apartments were vacant, especially in the categorised of self contain, one, two and three bedrooms apartments, as investigations showed that the cost of rental was high, coupled with limited cash flow in the system.

The Diamond Bank Estate Company offered for sale and rent, some of their properties at the Diamond Estate along Ada-George Road by Elioparanwo Road in Port Harcourt, and the advert publicity went on in newspapers for almost one year without any bargain struck on sale or rentage of the properties.

Also, Afribank estate had similar project, but with very minimal response, but findings revealed that such properties offered for sale and rental are for the high income earners, whereas, the bulk of demand for housing are in the low and medium income categories who need affordable houses.

Ideally, demand for affordable mass housing was very high, but the supply was very low and inadequate, and the advanced had been that mortgage facilities were not available, as such takes in longer time to recoup, than the investments made for high income earners, which mortgage period is short and with high profit, as buyers capable of parting with as much as N35 million to N45 million.

Knowing this fact, the Governor of Rivers State, Rt. Hon. Chibuike Amaechi in his interaction with Journalists in the last quarter of 2011 reiterated government efforts in providing affordable housing for the people.

He said government will not let the Diobu housing estate to die, as it is meant to benefit low income earners, and that N21 billion will be committed to it, in the long-run, while about N9 billion had already be committed.

One outstanding problem that put a challenge to housing development in 2011 was that of mortgage financing, as many primary mortgage institutions were not willing to commit their inadequate resources to a long-term mortgage programme.

So as to strengthen the long-term mortgage funding in Nigeria, the Central Bank of Nigeria (CBN) in the middle last quarter of 2011 issued a deadline for recapitalization of all PMIs across the country.

CBN through a directive from the director, other financial institutions department (OFID), Femi Fabanwo at directed that all the PMIs that operate at the state level recapitalize with the sum of N2.5 billion, while those that would operate as a National PMI to recapitalize with N5 billion or before December 2012.

Actually what the people are looking up to is a situation where there will be mass housing, and such that will be affordable and readily available.

It is for this same reason that a group, the Social Housing Advocacy Group (SHAG) in later part of October, 2011 came up with a resolution, which was signed by its chairman, Architect Nya-Etok Ezekiel, stating its resolve to champion the realization of delivering one million housing unit annually in order to increase the housing stock where the low income group will be the specific target group.

The group also declared support for sustained investment in mass housing and affirmed that housing development is the bedrock of the economy of developed nations, which contribute between 30 to 70 per cent of their Gross Domestic Product (GDP).

In all the housing sector in the 2011 witnessed some major events in terms of progress, even in the face of some challenges of sorts.

However, these challenges have given room to programmes and decisions among various groups and government agencies, aimed at advancing the sector and it is obvious the better things are coming on board through such decisions being taken.

 

Corlins Walter

Continue Reading

Housing/Property

N69.4bn Debt: AMCON Seizes Properties, Freezes Accounts Of Jimoh Ibrahim

Published

on

The Asset Management Corporation of Nigeria (AMCON) has taken over 12 assets belonging to Chairman of Global Fleet Group, Jimoh Ibrahim, and frozen all his accounts over his debt which amounts to N69.4billion.
The seizure of the assets is pursuant to an order by Justice R.M. Aikawa of a Federal High Court, in Lagos.
AMCON on Wednesday took effective possession of all 12 properties through its Debt Recovery Agent – Pinheiro Legal Partners, which include the following: the building of NICON Investment Limited at Plot 242, Muhammadu Buhari Way, Central Business District, Abuja; NICON Hotels Limited building at Plot 557, Port Harcourt Crescent, off Gimbiya Street, Abuja and the building of NICON Lekki Limited also at No. 5, Customs Street, Lagos.
Other properties include: The building of Abuja International Hotels Limited located at No. 3, Hospital Road, Lagos; another Property at Plot 242, Muhammadu Buhari Way, Abuja; the former Allied Bank Building on Mile 2, Oshodi Express Way, Apapa Road, Lagos; Energy House located on No. 94, Awolowo Road, Ikoyi, Lagos; NICON Building at No. 40, Madeira Street, Maitama, Abuja; a Residential Apartment at Road 2, House A14, Victoria Garden City, Lagos; NICON Hotels Building at Plot 3, Road 3, Victoria Garden City, Lagos as well as the NICON Luxury Hotel’s Building, Garki I, FCT, Abuja.
In addition to the takeover of the listed properties, the court also ordered the freezing of all accounts belonging to Ibrahim and his companies, including Global Fleet Oil & Gas Limited and NICON Investment Limited all of who are defendants in the suit No. FHL/L/CL/776/2016 presided over by Justice Aikawa on Wednesday, November 4, 2020.
The court also granted AMCON possession over all shares belonging to the embattled Ibrahim and his two companies that are domiciled in Nigerian Re-Insurance Company Plc (NICON) Insurance Company Plc, Nigeria Stockbrokers Limited and NICON Trustees Limited.
AMCON’s Spokesman, Jude Nwauzor, said all the assets that are listed by the court and scattered around Abuja and Lagos had been successfully taken over by AMCON with the help of court bailiffs and officers and men of the Nigerian police as mandated by the court.

Continue Reading

Housing/Property

Land Use Charge: Stakeholders Call For More Property Valuation

Published

on

Stakeholders in the real estate industry have said the Lagos State Government should increase the number of properties that have been valued under the amended Land Use Charge (LUC) Law, 2018.
They noted that this would take away the burden of paying high levies on properties by a few in the state.
The Deputy President, Real Estate Developers Association of Nigeria, Mr Akintoye Adeoye, who applauded the recent amendment of the LUC law by the Lagos State House of Assembly, said the number of properties that were captured before the suspension of the process in 2018 was too small compared to the population of the state.
He said, “The percentage of properties that have been assessed is still less than 30 per cent. Rather than tax this number of people, it is better for the government to widen the net and bring more property owners onboard.
“It doesn’t make sense to tax just a few people, especially in a challenged economy like ours. We should bring in more people rather than increase the rate for a few.”
Adeoye said the state government’s decision to amend the LUC law would encourage more people to invest in property in Lagos State.
A six-man ad hoc committee, chaired by Rotimi Olowo, recently presented the report of its findings from a public hearing to the House of Assembly revealing that the review of the LUC lawwas generally perceived to be arbitrary and unrealistic.
During the presentation, Olowo was quoted to have said the Section 1(2), “Pensioner” should be redefined to include all retirees resident in the state from federal and state institutions and from both private and corporate organisations domiciled in the state.
He said it was agreed by participants and stakeholders during the public hearing that vacant plots of land and unoccupied properties should be exempted from the LUC liabilities and a proper classification of commercial and residential property in the state should be done for the purpose of levying.
Among other amendment is the Section 17(c) (i) stating that there is no need for 50 per cent payment by aggrieved owners over disputed charges before their eligibility to appeal, while aggrieved residents and property owners should pay the preceding year’s charges when the disputed charges are being resolved.
Akintoye noted that the resolve to amend parts of the law especially the aspect covering pensioners was a welcome development.
He said, “Before now, it used to be only Lagos State retirees but it has been extended to others across the federation.
“Lagos market is Nigeria’s market and people from all over the world invest in the state where many of them also retire. It doesn’t make sense to have that dichotomy in the treatment of pensioners.”
The President, Nigerian Institute of Building, Mr Kunle Awobodu, stated that to make the newly amended law achieve its objectives, there should be modalities for implementation to prevent fraud and false claims.
“I am in agreement with the amendment. The only thing I am sceptical about is how those from the private sector will be identified. It is difficult but it can be done. It is difficult to have an accurate record of pensioners from the private sector. But there should be modalities for implementation,” he added.
A former President, Nigerian Institution of Estate Surveyors and Valuers, Mr Bode Adediji, said even though the details of the amendment had not been made public, its assent by the governor and implementation should be looked into for the benefit of Lagos residents and investors.

Continue Reading

Housing/Property

Housing Deficit: LASG Completes 360 Homes In Ikorodu

Published

on

Lagos State Government said it has completed construction of 360 additional housing units for commissioning soon as part of its efforts to tackle the challenge of housing deficit in the state.
The state Commissioner for Housing, Mr. Moruf Akinderu–Fatai, disclosed this recently, while conducting a validation and inspection visit to Lagos Homes, Lagshom Igbogbo Scheme 2B, in Ikorodu Local Government area of the state.
“Lagos is adding 360 more homes to the existing stock of homes in the state in the next few weeks,” Fatai said.
According to him, the state government has resolved to complete all housing schemes that were set aside by the previous administration in order to speedily bring succour to residents by increasing the availability of decent accommodation for the increasing population of the state.
“Reducing the housing deficit and bringing more people on the home ownership ladder through provision of affordable and quality homes are tasks that are germane to building a 21st century economy.
“Hence, the administration of Mr Babajide Sanwo-Olu is frontally pursuing the goals of completing all the on-going housing schemes to ensure that befitting and decent accommodation is available to the ever increasing population of the state,” he said.
The Permanent Secretary of the Ministry, Mr. Wasiu Akewusola, who also affirmed that over 360 families would soon move to their homes, expressed satisfaction with the on–going works at the site and encouraged the contractors to keep up with the good job in order to deliver at the targeted date.
He disclosed that in year 2020, not less than 3,500 homes in Sangotedo, Idale in Badagry, Odo Onasa/Ayandelu, Ibeshe, Egan-Igando and Ajara would be completed from both government owned schemes and joint ventures.
The LagsHom Igbogbo Housing Estate is made up of 30 blocks of buildings with 120 units each of three-bedrooms, two-bedrooms and one- bedroom, making a total of 360 units of family homes.
In addition, the scheme which commenced in 2012 has a central sewage treatment plant, water treatment plant, high quality road network, and  Street lights.

Continue Reading

Trending