Olufemi Oyedele is the Managing Director/ Chief Executive Officer, Fame Oyster & Co. Nigeria. In this interview with DAYO AYEYEMi, Oyedele foresees improvement in the real estate sector in 2024 going by the activities that are going to be generated as Dangote refinery and two other refineries in Port Harcourt and Benin commence operation. He also speaks on how government can stimulate the sector for growth.
What does 2024 hold for the real estate sector?
2023 was not a palatable year for the real estate sector because of the ill-timed, selfish and anti-poor cashless policy of Mr. Godwin Emefiele. There were more properties coming into the market than purchased.
2024 will be better for the real estate sector as the government is showing signs of being settled.
What do you mean?
Dangote Refinery and two other refineries in Port Harcourt and Benin are already working in Nigeria. This means that there will be more people employed to work in the refineries and other oil and gas allied industries. With high level of fund in circulation, majority will find their way to the real estate sector. This is because housing is a basic need of everyone and a bundle of joy. It is a status symbol in Nigeria and a real store of value, especially against ravaging high inflation in Nigeria.
In 2024, people will invest more in the real estate sector due to the high trust in the government and high level of fund that will be in circulation with the Federal Government Budget of Renewed Hope’s proposal of N27.5 trillion. The Diaspora Nigerians are also interested in buying properties at home and with the creation of mortgage system that can cater for their housing finance need, I think the real estate sector will have a field day in 2024.
Which particular projects will shape the sector and Nigeria in 2024?
The residential real estate project will lead the pack with institutionalised construction of more than a thousand units by federal government, state governments, ministries, departments and agencies (MDAs) and private organisations like Dangote Group and BUA Group going into residential real estate development. The commercial real estate, especially shopping malls, will witness tremendous development and industrial estate development will follow.
Who would be major players in the sector?
BUA Group will remain a major player in the real estate sector. I foresee BUA Group going to Port Harcourt to build a residential estate in that city due to high demand for housing that will be brought about by the reactivated refineries.
In which area can the government intervene to stimulate the sector for growth?
The government should reform our mortgage system so that people can buy their first house with mortgage loan. Government should take care of the needs of those below Level 8, those who cannot buy houses with their meagre through the construction of social housing.
High cost of Building materials’ is still hurting the property market, fueling high cost of housing and rental values. Is there any soft landing in 2024?
Government should implement the local content policy in housing production. If we still solely depend on expensive sandcrete blocks, imported sanitary wares, imported tiles and imported roofing sheets for our houses, prices of houses will be exorbitant. We must learn how to use timber partitioning and clay walls and roofing sheets to make our houses cheaper.
What are the other challenges confronting the housing/real estate sector?
We do not have skillful tradesmen in the sector again as the youths expected to work on site are now commercial bicycle riders. We don’t have infrastructure like pipe-borne water and tarred roads. Employment is the major booster of housing. The unemployment rate of Nigeria is too high.
What are major reforms required to turn around the sector positively?
Government should assist Nigerian companies producing building materials like tiles, electricalcables, sanitary wares and furniture and fittings.
Does the Federal Mortgage Bank of Nigeria (FMBN) have the required resources to provide funding to primary mortgage banks and house buyers?
FMBN should aggressively shop for its fund from federal ministries’ pension fund and investment cooperative societies of organisations like NNPC, Nestle, Unilever, Cadbury, Nigerian Ports Authority, etc.
What can be done to reposition FMBN for better performance?
The federal government should commercialise the bank with strong law that it cannot turn into commercial bank. It can only act as bankers to primary mortgage institutions and private property developers.
What are other sources of funds that must be developed or explored in 2024 for real estate development?
Diaspora fund is very vital. In 2022 the amount of Diaspora fund that was remitted to Nigeria was more than the amount earned through crude oil sale. Federal government can also sell its abandoned properties to develop residential buildings for the masses.
Dangote refinery will definitely commence operation in 2024. What positive effects will it have on real estate development and investment?
Dangote refinery will have positive impact in property landscape of Eleko, Awoyaya, Akodo, Bogije and the other communities around the refinery. Workers will definitely push up the supply of housing in these communities.
What are the things to look out for before buying land in Ibeju-Lekki and Epe corridor of Lagos State as of today?
Good title! Anybody buying land in the area must be ready to call land surveyor to do survey plan for him or her, and if the plan is completed, the prospective buyer must go to the Surveyor General’s office at Alausa to do charting of the survey plan to check if the land is within government’s acquisition. A lot of areas in Lekki are prone to flooding. Prospective buyers should look for professional estate surveyor and valuer who will look into the features of the site to determine whether it is prone to future flooding.
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