Business
Expert Bemoans Low Investment In Real Estate Sector
The Managing Director, Lordsfield Ltd., Mr Olajugba Oluropo, has bemoaned the low level of investment in the real estate sector.
Oluropo told newsmen in Lagos that the low investment in the sector was responsible for increasing rent charges in the country.
The real estate expert said that the few investors in the industry were not enough to build houses that would meet the increasing demand for housing throughout the country.
“Real estate business is a capital-intensive venture and not many of the developers in the industry have the required capital.
“Houses are costly simply because the few in existence are not readily available. The price of houses is simply a function of demand and supply.
“The moment there are ample houses in place, the cost will eventually come down and become more affordable, irrespective of the location or quality,’’ he said.
Oluropo said that the country only needed an enabling environment that would encourage more investors (local and foreign) into real estate business.
According to him, housing units were as low as N5, 000 and N7, 000 prior to now.
“But today, these same housing units of two-bedroom flats sell for N25 million and above in Lekki Phase II.
He said “In those days, costs and the process of production were low and straight forward. Then, a bag of cement was N8, compared to about N2, 000 that it is today.
Olorupo said that the current demand for property far exceeded supply and the situation had made the available ones to be out of reach to the average Nigerian.
He advised government to use proceeds from the land use tax to provide the enabling environment for real estate investment.
He said “If this is done, it will improve returns on investment in the sector, which is currently between four and five per cent.
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