The viability of the real estate sector in Nigeria

land for sale in ajibawo ogun state
Real estate business is real business. We shall now concern ourselves with the ordinary meaning of that word real estate, primarilly ownership of land and whatsoever is upon the land usually referred to as landed property. Land is one of the four factors of production namely land, labour capital and entrepreneurship. But unlike all the other factors of production the supply of usable land can only be obtained at a
very great cost. The ingenuity of man has through irrigation provided more arable land in Israel, through  the bombarding of clouds in Texas USA to create rainffall and grow crops in a near arid land, through reclamation in Holland to create the Zuider Zee making land more available for industry, agriculture and residence. Through sand filling, land has been created out of the sea for use in building one of the worlds largest and now busiest airports with a very long runway in Japan. Most  of the pyramids in Egypt are no more alone in the desert. Irrigation has brought them neighbors, people and industry in close vicinity. Back in Nigeria we witness the real reclamation done at Iganmu  in Lagos for land used in building that monumental edifice, the national arts theatre. Private enterprise was at work in the 1970’s in the Aguda and Coker areas , where massive land was reclaimed  for the construction of showpiece residential houses. The projects mentioned above are usually expensive. The poor masses are
however not deterred. Uncoordinated attempts without legal approval have been made here and there by the poor to reclaim land usually for the building of shanties, Maroko in Lagos and Bundu in Port Harcourt are classic examples. The governments of the various state eventually descended on the slum dwellers and pointed and to then in very unequivocal terms that that was not the proper way  to go about the business. These places were bulldozed and the governments have put in appropriate development initiatives.
The owner of any land anywhere has an asset, a real asset, an asset you can view at any time of the day and an asset that will continue to appreciate in value over time. Land is immovable and when purchased we can safely refer to that transaction as an exchange. Where proper documentation has been done including conveyance and the certificate of occupancy obtained, the exchange may be deemed to have been properly completed. The certificate of occupancy  (aka C of O) is an acceptable collateral for a bank loan for the purpose of adding value to the said land or for another business project. Price paid for any land will depend on its size and location. Development that has already taken place including access roads, easy connection to electricity  and supply of potable water will go a long  way to determine price to be paid. I must be quick to add however that wherever there is land, development will seek it and these facilities will eventually follow. There is a population explosion in Nigeria, rapid urbanization  and spill over of this urban population into the hitherto contiguous rural areas for residence, industry and agricultural purpose. If you own land, even in Antarctica, the value will continue to appreciate overtime. Real estate business is good business. In the 1970’s a plot of land in Akoka,Lagos was sold for N300 (three hundred naira). In the 1980’s the same plot of land was sold for N 60, 000 (sixty thousand  naira). Today  the going rate is about 3million naira and that is if you can find one to buy. If you have some idle cash to spare, we advice that you buy and own your own land. Let us now examine why people want to buy land.
Persons from families that are not historically land owners or whose ancestors had frittered away communal land for uneconomic reasons, usually have a huge appetite, when they come into money, for acquiring land. People wanting to purchase land will fall into any of the two  broad groups or into both. The first group  will  buy  land to enable them  build a home, house or for industry, agricultural included. The second group are land speculators who buy so that they  can resell at a profit when the value appreciates in the market. They are all entreprenuers (a person who enters and takes). They are all going into business and are all taking a risk, a good risk of course. Both end up as winners. The principal needs of a man are food ,good health and a shelter for himself. The accolade of a senior tenant is not good enough for one. An ageing unmarried bachelor will shudder if derisorily  called king of the boys (Obong Etok Eyen  in Efik). There is dignity for a man in having rights to the key of his front door. Having that right is the man’s choice. One can  have the rights to the keys of one’s front door but the dignity can be punctuated by a cantercerous hostile and censorious  land lady  who from time to  time is breathing huskily over ones  shoulder. It is better for one to own his own house. There are two ways of owning a house. You can build your own house or you can buy a house. Let is look first at the second alternative in Nigeria.

The market for buying a house or for house exchange in Nigeria is almost or largely undeveloped. The only source of house purchase is the government when the government has built a few estates here and there. The buyers are usually civil servants. The absence of a market for the buying and selling of house  in Nigeria does not auger well for the economy. Mobility of labour is hard and at the end, resources are not allocated  optimally. A young  man in Europe out of school and who has secured a steady  job can apply for a mortgage to buy his  own house. He can relocate easily when he want to move from London  to Edinburgh. He will quickly sell his house in London  and readily buy another in Edinburgh. There is a very virile market for the buying and selling of houses all over Europe. The structures put on ground in Nigeria for the efficient development of mortgage services are not good enough so far. There does not appear to be a strong coordinating link between the individual mortgage seeker; mortgage banker insurance houses and government in this regard. Mortgages are developed appropriately on provision and use of long term funds. This must usually be assurance premiums and a strong pool of assurance fund with the mortgage bankers, fund from institutional investors secured on government long-term stocks and bonds. Long term interest rates can thus be guaranteed and reasonable charges made against the mortgagee.One does not build a house with a commercial bank overdraft. I believe that with change in the economy of Nigeria,planners and administrators will take a second look at  the mortgage scenario and put in more effort in harmonizing the link between the operators. Then can a good mortgage business thrive in Nigeria. Then will it be possible for people to borrow money in a large scale to build their own houses. The state of the real estate business in any country is a pointer in the development index in that country. Let us take a look at why people do not sell houses in Nigeria. A house when built can be let out to tenants. Part  of or all this building can be used by the owner. Most often like a king or a monarch, he will live all his life in that house and if not born a king, he has made himself one. After all said and done a man’s house is said to be his own castle. Another reason why one may not want to sall and relocate  is that it is generally assumed that one who wishes to do so has fallen foul of the law or has become a proven bankrupt. The market for the buying or selling of houses appears to be non – existent in Nigeria. Mortgage facilities can be obtained but it can be a lengthy and cumbersome business. At the end one has to rely on one’s saving or a windfall in business to make one’s dream come true. You too can become a real estate owner. A plot of land when acquired can be developed over a given time frame. Some do so with an anticipated retirement time in mind. When completed part of the building can be given out to tenants. The demand for housing in our towns and cities is enormous and a landlord is not short of prospective tenants. Land may be acquired and there is little prospect of immediate development. Where no time frame has been given by the government for an immediate development of that area, the said land can be used for horticulture or let cut to one member of the roaming  brigade of pastors in search of where to pitch a tabernacle. Head or tail, the land owner is a winner.
Real estate developers are not speculators. They acquire land to enable people own their houses therein. They can also accept a commission to build according to plan for the future house owner. The advantage of a real estate developer initiative is there. Lagos state is a special case where with a rapidly exploding population and pressure on housing and business premises is great. Ogun State which is a neighboring state is currently offering a fair measure of relief to Lagos and now is marked out destination of choice for real estate development. The developer, unlike the individual, can articulate plans for the estate. The developer will ensure that plans are put in place to make the estate environmentally friendly. Appropriate facilities will be provided. Massive tower blocks will not be allowed to crop up,so that ir will not become a concrete jungle. If this is allowed the only clear view one may have from his house may be the bright sky and the depressing sight of cloistered children in the opposite tower block or women lingerine and washed diapers hanging at the window sills. One can choose his friends but one cannot choose his neighbors. A developer will however while not choosing neighbor can ensure that persons or organizations that have potential nuisance value are not allowed access to the estate. A prospective nuisance value may include noise pollution from a manufacturing outfit like an aluminum foundry or uncontrolled high – decibel noise by some religious organizations or dirt/scrap environmental polluting mechanic workshop. A doctor will be encouraged to pick up a plot for a surgery and so also a pharmacist and a tender – age school proprietress. A bank can  buy a place at the fore cour  for retail banking business and space  will be provided for a security post.


Our company Care Link Ventures is in the business of real estate, development  finance and management because  we wish to give the public the best and accurate information in this sector of the economy. We are in the business, to help government develop and actualize that vision of housing for a majority of our people. We are in the business so that our clients can tap from our wealth of expertise in the field. We are also in this business so that clients can have value for money in their investment. We encourage you to take up the challenge of planning to  own your house. s

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