As a real estate company, how would you rate the industry’s performance in the last few years, especially 2019?
I’ll rate it as impressive, a lot of good development projects have been completed, and more are coming up, we have more developers trying to build for the people and not for their pockets.
What are the growth prospects especially this year?
Well, I’m expecting a huge surge in home ownership for the middle-income earners, with more people taking up mortgage financing. I’m expecting an increase in rental prices, and also an ease in rent payment through monthly instalments.
What are some of the challenges you think real estate development companies encounter in Nigeria and what can be done to address them?
I’ll be answering this from the angle of the “housing deficit” in Nigeria.
I think the most significant issue that real estate development companies face is the “High Cost of Property Development” meaning increasing costs of building materials, high labor costs and more. On most places on the island, to build on a land you have to sandfill, after which you will have to do raft foundation which has to be some meters high, you also have to consider drainages and road, all these increase the sale price of properties to the end users.
Another significant problem is accessibility, I say it, if there was a train system from ibeju-lekki to Victoria Island, people won’t mind living as far as ibeju-lekki/ Epe and work in Victoria Island, knowing that they can get to work in 45 minutes. The roads are bad and not motorable, when it’s the rainy season it gets worse, and mainstream Lagos is already overpopulated. So developers have to do more to convince people to buy properties in the newly developing areas.
Another problem is sales of properties, so after building, the biggest headache is to sell, and there’s not much disposable income from the consumer end, and to solve this developers will need to offer more in terms of longer instalment payment, but unfortunately the cost of their money won’t allow, access to financing is not just difficult, the rates are unfriendly, and you have to battle with inflation. To solve this, financial institutions need to give better rates for project financing,and the government also has a lot to do.
Another menace is the “Land grabbers-Omonile”, they make life unbearable for developers, requesting for unlawful payments when development is on-going. The government has a big role to play in solving this problem.
What roles do you think the government, the private sector and individual investors can play to reposition the industry?
The Government can do well to make property documentation easier and faster to get, the government can help by taking up road construction projects to give better accessibility, and also help with the Land Grabber menace. The private sector players like the financial institutions and commercial banks can do well to give better rates for financing real estate projects.
There has been an influx of indigenous investors into real estate in recent times due to the unregulated nature of the industry. Has this had any effect on the property market?
Yes it has, more people are now interested in owning real estate than ever, treasury bills rate has dropped, stocks are unreliable, and real estate seems to be the best option for true wealth generation. The influx of these investors has its advantages, for example Ibeju-Lekki has opened up due to the influx of investors and developers, this has a great impact on the lives of people and can force the government to put proper infrastructure in place to accommodate the development. The price of property however has remained fairly stable.
Between foreign and indigenous investors, which do you think the industry needs more at this time and why?
The industry needs both, they’ll continue to play a huge part in the development of the real estate sector and the economy as a whole.
What are the long and short-term growth plans for the Novarick Homes brand?
In the short term, we’re working to position our brand to drive inclusion of more millennials into real estate investment, by coming up with genuine and innovative ideas to increase property ownership.
In the long term, we want to be known as the company that builds greener, cleaner and more sustainable communities, with affordable housing. This is our long term goal, this is what we stand for.