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Femi Oyedele is the Managing Director/Chief Executive Officer, Fame Oyster and Co. In this interview by DAYO AYEYEMI, the estate surveyor and valuer speaks on some of the gains and shortcomings of the real estate sector in 2022, calling for an improvement in the housing production/delivery system.
WHAT is your opinion on the performance of Nigerian real estate sector in 2022?
Despite the global challenges in the business sector in 2022, especially the economic implications of the Russian-Ukraine war, the unprecedented inflation rate in Nigeria, the avoidable nationwide flooding, the anti-investment building collapse, and the unfriendly policies of the Nigerian governments on the sector, the real estate sector still mustered enough energy to perform wonderfully well compared to other sectors like manufacturing, transport and education in the first three quarters of the year.
The real estate sector contributed over N7trillion to the gross domestic product (GDP) of Nigeria and had a growth rate of 16.3 per cent compared with its 2021 “Quarter-on Quarter” performance.
The number of housing stats in the third and fourth quarters of 2022 showed improved investors’ trust in the sector especially as this trust had earlier been battered by the uncontrolled building collapse. In addition, the activities of miscreants and rogue estate agents on unsuspecting property investors, and high rate of unpredictability of economic factors especially the interest rate, foreign exchange rate and overall income as well as insecurity in the nation, which has deferred all solutions, did not help matters. In the three quarters ending in September 2022, the real estate sector seemed to be the redeemer of Nigerian economy as it affected building materials market, income generation, employment generation and infrastructure development.
What are major noticeable achievements in the sector?
The major achievements of the real estate sector are in the area of the number of housing units that the sector was able to contribute to deflate the existing high rate of deficit. The sector improved in its employment generation and income generation in the form of salaries and wages for the workers, profit for the investors and tax for governments. Though our slums are growing at an alarming rate, there are indications that the sector performed better than last year and COVID-19 period.
What are the shortcomings of the sector in 2022?
The shortcomings of the real estate sector is in the very poor contributions it made in terms of eradicating the housing problems of Nigeria. It only contributed less than 5 per cent overall to the housing stock of Nigeria which has a deficit of over 20 million housing units now. Governments still remain the major contributors in this area. There should be an improvement in the housing delivery system in such a way as to empower the private sector participants to be the main players in our housing delivery system.
What are the things that government and stakeholders ought to have done better but failed to do?
The government and stakeholders-comprising developers, professionals, building materials manufacturers-failed to collaborate adequately during the year. There was not enough rapport between the government and the other stakeholders. Building materials, especially cement and reinforcement bars still remain a major price determinant of the products of the real estate sector in Nigeria. The government should be interested in a research and development (R&D) that will proffer alternatives to these products. We need a housing culture that we can be identified with and should be done with the trial and error that we have been practising in the sector. For long, government refused to realise that the economic performances of Nigeria are greatly dependent on the performances of the real estate sector over the years. The best way to impact economic growth and development in Nigeria is through improved real estate sector.
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