Real Estate And Property Development In Nigeria ( Lagos As A Case tudy )

There can be no meaningful growth or development either vertically or horizontally in the real estate sector without Land availability. Land is a factor of production [major though passive] which without a lot of actions regarding production cannot take place.
Land which earns rent therefore is a very necessary and an important tool in real estate and property development and therefore must be well managed.

Apart from the establishment and development of Abuja, the creation of states, the other significant measure which the military undertook in their long administration of Nigeria was the control of land through promulgation of the Land Use Decree which was passed in an emotional manner and therefore cannot be regarded as a true and realistic land reform measure.

Most Land owners with the exception of those who live in urban areas still see themselves as the owners of their land and their neighbour see them in the same way. It is only the government that has persuaded itself that it is the owner of the land in the country.

The idea of holding in trust for people would appear to be opportunistic. The dilemma today therefore is that land as a percentage of total development cost is far higher than it was prior to 1978 i.e. before the promulgation of Land Use Act. The main reason being that there is a deliberate policy of restriction of supply of urban Land which has increased cost.

Focus: However, as high as the cost of development in urban areas due to the reasons given above are, so also are the reforms. Simply said. The higher the risk the greater the returns. This is obvious in many ways and is further enhanced the fact that Housing Stock in most urban areas of Nigeria especially are far short of required needs.

Whole supply periodically is in shorter burst than expected or in other words demand far exceeds supply in the real estate sector which in simple economics means prices would go higher because of stiff competition for the available few of the stock.

Therefore it is conclusive that a very bright opportunity existing in the real estate/properties sector of this economy though it is highly capital intensive and needs professional guidance to profit from such investments.

This is even more interesting now that the democratic government is in place and the country’s economy is being opened up by the privatization scheme of the present administration which is supposed to usher us into more effective management of resources and reduce redundancy in public utilities management and maintenance. It would also break monopolies like the National Electric Power Authority, NEPA. All of this will inevitably improve general efficiency, production and quality of life.