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Developer laments effect of harsh economy on real estate market

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By Kingsley Adegboye

The Nigerian real estate market has been hampered by the general lull in the nation’s economy with most operators now struggling to remain in business.

Disclosing this at a media parley in Lagos penultimate weekend ago, Mr. Omo Aisagbonhi, Chairman and Chief Executive Officer of OMAIS Investment Group, developers and owners of Trinity Mall, Awolowo Way, Ikeja, said the harsh economic situation has become so critical that the concern of most Nigerians today is how to get food to eat and be well but not how to buy property either for investment or to be occupied by them.

President Muhammadu Buhari and Vice President Yemi Osinbajo at the opening of a 2-day National Economic Council Retreat at the Statehouse Conference Centre on 21st March 2016.
President Muhammadu Buhari and Vice President Yemi Osinbajo at the opening of a 2-day National Economic Council Retreat at the Statehouse Conference Centre on 21st March 2016.

According to OMAIS boss, lack of liquidity and harsh economy climate as being currently experienced in the country have made many property investors to be struggling for survival now, while would-be house owners, property retailers, renters, and others are not considering investing in properties, pointing out that banks are not helping matters as cash crunch continues to bite harder by the day.

Lamenting the situation, Aisagbonhi noted that “Banks have refused to lend to real estate investors while the nation’s foreign exchange is dancing naked. As I speak, this is no smiling moment for real estate investors. We are all struggling to survive, and it seems the nation itself is trying to survive. As a nation, we are yet to have a clear direction of where we are going.

Nigerians have drastically reduced their spending and investments in real estate. “The disposition of the government to many of these things has not been encouraging to property investors, especially with some of the policies which have done more harm than good for the real estate sector. The asperity of some of the government policies, especially regarding the importation of certain items into the country, has led to a situation whereby investors now take to smuggling or telling lies in order to get some of such goods into the country.

This has led to the enrichment of neighbouring countries like Benin Republic and Togo at the expense of Nigeria.

“In other parts of the world, the governments encourage people to have their own houses, but in Nigeria, the government seems to be discouraging would-be house owners through some of its policies and bureaucracy, many of which are continuously getting more difficult to meet.

“Multiple taxation is another area that the government needs to address quickly, if it really hopes to divest the economy from being oil dependent, and turning it into a country which makes huge revenue from the real estate sector.

“Multiple taxation is still another issue affecting real estate, and it has the potential to destroy any business, especially the low and medium- size businesses. To prevent this from happening, the government needs to find means of ensuring that the idea of multiple taxation becomes a thing of the past,” he said.

“Let the government come up with more real estate-friendly policies which will make land cheap, obtaining of titles and other necessary land documents less cumbersome, as well as putting structures in place that will make banks grant mortgage loans with single digit interest rates to real estate investors. Government has no business in building houses for its citizens.

It should create the enabling environment for developers to build”, Aisagbonhi stated.

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