Group Managing Director/CEO of Oceanic Bank International Plc, Dr. Cecilia Ibru, has identified the domestic real estate sector as a thriving industry that affords sus-tained long-term return for investors even in this era of the global economic meltdown.
To help attract more investors to the sector, she called on government to provide an enabling legal framework and environment that will spur the growth of the construction and mortgage industry.
She made the call last week in a paper Challenges & Prospects of Financing Real Estate Projects in the Era of Economic Meltdown presented at a 2-day national workshop on Developing Real Estate Investment Trusts (REITs).
Ibru, decrying the current structure of the Land Use Act, said it poses a major problem and discourages foreign investors as they cannot be confident that the houses they construct belong to them because of the powers vested in the state government with respect to validity of land acquisition.
Ibru, represented by the Managing Director, Oceanic Homes, Savings & Loans, Mr. Edward Sido, also identified the lengthy process of obtaining governors consent to land transactions as another serious bottleneck militating against the growth of the mortgage sector.
The Oceanic Bank boss said, â€œIn Africa and other developing economies, housing projects and accommodation requirements remain a vital issue for consideration in every family. In addition, rising population and urbanization have intensified the demand for houses. This huge pent-up demand for affordable housing in Nigeria has created the need for financial instruments such as Mortgage backed Securities, Real Estate Investment Trusts, which will enable the provision of adequate and affordable housing.â€
â€œHousing professional and analysts estimate that Nigeria needs to build a minimum of 1.5 million homes to attain the goal of â€œhousing for allâ€ as enunciated in the Housing policy of the Federal Government of Nigeria.
State governments also place high priority on provision of affordable housing for its citizenry and are planning to build at least 500 homes in each of the 36 state capitals in the next two years. With the competing public infrastructure, security and power needs facing state governments, housing is not often seen as a priority for government funding.â€