For investors and prospective home-owners who want to start with land, time is now to go to the property market as improved land administration and policies on titles and building approvals have made transaction not only easy but also fast and cheap.
This means that ownership of land now gives the buyer economic power as he can trade with it or unlock equity on the property. This is a clean break from the past when, because of lack of valid titles, both land and property standing on it were regarded as dead assets.
Nigeria is said to have a huge stock of dead assets and, according Andrew Nevin, partner and chief economist for PwC, it is only land and property ownership reforms that can unlock these dead assets whose value he estimates at N307 billion or 81 percent of the country’s GDP. The reason for this was lack of valid titles which discourages mortgage loans.
Many state governments are already carrying out these reforms, though not on large scale, and that explains the rise in land price in some cities, especially Lagos where prices increased significantly with Victoria Island and Ikoyi growing by 11.3 percent and 14 percent year-on-year, respectively. In Agungi, along the Lekki Epe Expressway, prices grew by 18.9 percent.
Like Lagos, where improved land administration accounts for the land price increase and ease of obtaining titles, Edo State has also improved its land administration such that the use of GIS technology in the state has reduced the cost of obtaining Certificates of Occupancy by over 80 percent, while Enugu State government has approved a 50-percent discount on accrued land use charges.
A recent report by Northcourt Real Estate notes that the monthly distribution of property titles to beneficiaries of the Homeowners Charter Programme in Ogun State has made land purchase in the estate an interesting and rewarding experience, just as Ondo State has also launched an automated Land Use Charge Payment System.
In the Eastern part of the country, Anambra State, which is the commercial hub of that region, has embarked on a revalidation exercise culminating in the issuance of digital titles to land owners.
Ayo Ibaru, director, real estate at Northcourt, said that as an asset class, land is expected to hold its own waiting patiently as its use is decided by the owner’s aspiration and situational economics.
He affirmed that towards making land administration effective, a number of states have begun implementing the ‘Systematic Land Titling and Registration’ as part of a broader plan for growing investment.
“The use of technology in land administration is paying off in states like Edo and Anambra and other states are considering the adoption of same. With more registered titles being issued in shorter timeframes, there is a growing case for long-term investment, especially in states outside the leading cities of Lagos, Abuja and Port Harcourt,” Ibaru said.
As a country, Nevin says Nigeria needs comprehensive reforms in its land and property ownership systems given that its rigid traditional land tenure system and the current land titling system exclude many people from formal land ownership, hampering full-scale economic activities, especially real estate which happens on land.
As a factor of production along with labour, capital and organization, land is so important that the other factors would be redundant without it. It is the bedrock upon which the satisfaction of all human needs is built. Food, clothing and shelter are all human needs met from resources derived from land.
This implies that the housing deficit burden on Nigeria as well as issues of food security will be a thing of the past if states become more liberal in their land administration and policies on building approvals.
Land reportedly accounts for 20 percent of the earth’s surface, and consequently, every economy requires comprehensive land regulations and policies to guarantee the effective usage of its land and the maximisation of resources attached to it.
From traditional, economic and industrial perspectives, experts see land as very unique and strategic and its availability plays a pivotal role in the development of any economy as it increases investment inflow.
Industrialisation, housing development, agriculture, mining, oil exploration and other economic and productive activities that lead to improved standard of living, job creation, economic growth, among others, are possible only when land is available and harnessed for such purposes.
CHUKA UROKO
