The Problem Statement
The Real estate sector in Nigeria has been in decline for the better part of the last 5 years. Compared to the rest of the world where it is the largest sector in developing countries and in terms of contributions to GDP, providing the largest employment for them.
It is still burdened by several issues hindering its growth in that sector and makes it stagnant. It is faced by Bribery and Corruption, lackadaisical attitude to the registration of lands, high cost of construction, and incessant taxation amongst others.
The Policy Solution
Real estate practice in Nigeria is governed by a number of laws both at the Federal and State Levels. Real estate is, however, largely regulated and practices as almost other laws governing real estate practice in Nigeria are state laws— which differ from one state to the other.
By the provisions of the Land Use Act, It vested all land comprised in the territory of each State (except land vested in the Federal Government or its agencies) solely in the Governor of the State, who would be held in trust and administered for the use, benefit and common good of all Nigerians within that state.
From the foregoing, Lagos State being a commercial city has a number of laws governing and regulating real estate practice, ownership of land etc. some of which have been adopted by some of the other states.
NIGAC Constructive Position/Take
Even though local and foreign developers have carried out a large number of projects in recent years, in most segments demand has been outpacing delivery. As a result, the country is far undersupplied in a handful of key areas, including high-quality office space, affordable housing and formal retail.
The industry faces a number of pressing challenges. Nigeria’s property sector is widely regarded as “high-risk, high-return”. Its market is one of the most opaque in the world, ranking 96th out of 97 nations surveyed in the 2012 Global Real Estate Transparency Index devised by JLL, a US-based real estate consultancy.
Its regulatory environment is complex and outdated, and the bureaucratic costs associated with building, transferring and registering a piece of property are widely regarded as exorbitant.
Despite recent initiatives aimed at developing the formal housing market, most Nigerians still cannot afford to buy a house, especially in Lagos and other fast-growing urban areas, hence much of the populace lives in self-built informal housing. A lack of reliable, up-to-date market data also poses a major challenge for domestic developers.