Cost Of Investment Hinders Real Estate Growth – Expert

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Atown planning consultant, Mr Olaide Afolabi, has decried high cost of investment and other challenges facing developers in the course of developing a building project.
Afolabi, who is the President, Town Planning Consultants of Nigeria (ATOPCON), said that the high cost of investment and other challenges were major reasons for persistent increase in cost of house rent.
He said that this was not peculiar to the property industry as it cut across all sectors of the economy.
The ATOPCON president urged the state governments to look into the whole land registration processes to restructure and streamline them to make the real estate sector more attractive to both local and foreign investors.
According to him, the protocols and requirements before a developer can be certified by the government to commence development of a building project are too demanding and cumbersome.
“If there is an issue that gives real estate investors in Nigeria sleepless nights, that issue has to be the bureaucratic process of land registration.
“Nigeria is among the worst globally when it comes to the registration of property.
“The registration process can last from six months to two years, taking an average of 12 procedures and costing about 20.8 per cent of the value of the property.
“This in itself is a turn-off for most real estate investors, because it invariably disrupts their business plan,’’ Afolabi said.
The ATOPCON president said that there was no form of credit or mortgage facilities in place to encourage investors.
He said that these were preliminary expenses before the investor or developer could be certified to start the building project considering the current high cost of building materials.
Afolabi said that the situation had discouraged many investors from investing in the property industry.
“The high cost of investment in Nigeria is unfavourable for investors and the situation is worsened by the dwindling socio-economic situation of the country.
“The cost of doing business in Nigeria is too expensive considering the cost of production and provision of other necessary requirements for the business to thrive,’’ he said.
The ATOPCON chief said that the cost of investing in the construction and real estate industry was so high that it had scared away many investors from investing in the industry.