• Friday, December 01, 2023
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Government needs to collaborate with financial institutions to offer affordable mortgage for homeownership – Kuyebi

Government needs to collaborate with financial institutions to offer affordable mortgage for homeownership – Kuyebi

Ayo Olanrewaju Kuyebi is the CEO, God Made Homes (GMH) Luxury. He has been a builder and project management consultant for many years. In this interview, he takes a look at issues in the housing sector offers insights on his transition from an employee to owner of a thriving real estate firm with iconic projects located in Ikoyi, Victoria Island, Lekki, Gbagada and other places. He also explains why there is high incidence of building collapse in Nigeria, and urges Nigerians to stop building on water channels. He also speaks on the mortgage industry in Nigeria and how it impacts on home-ownership. Chuka Uroko, Property Editor, reports.

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The real estate sector in Nigeria is over-crowded with developers, professionals and sundry service providers. How were you able to carve a niche for yourself?

It’s by actually placing a premium on experience. There is a popular saying that the level of your training determines the level of your reign. In 2006, I was actually given the opportunity to work in the bank as a teller but I rejected the offer. Instead, I joined an engineering firm for training purposes whereby I was not placed on any salary, but I walked away from a job where they would have been paying me over N200,000 as at that time. For me, it’s all about experience and that was exactly what I wanted.

To be the best, you have to learn from the best. As at the time I am talking about, I was a young engineer. All I set out to achieve was to be one of the best to be reckoned with in the industry and that was the driving force. To be very candid, I wasn’t born with a silver spoon but I have to survive. I have been learning this since age 9, on how to survive.

What I did differently was that in the company I worked, they trained me on how to design and there was a tutorial class close to my office. So, in the evening when I closed by 5 pm, I went for the tutorial to do two hours for which I was paid N150.00 per hour and that was what I used to sustain myself in addition to the little allowance I was getting from home.

What informed your decision to major in building in preference to other segments of the real estate sector?

Why I want to be in the building sector is because people rarely get value for their money in the sector, the majority of people get their fingers burnt because some developers promise A and deliver Z.

When we started, pilling was very complicated. People doing it then didn’t have the technical prerequisite to undertake such projects and rate of foundation failing at that time was actually alarming and I took it upon myself to venture into piling, promising myself to do something different and ensure that every client gets value for his money.

In 2010, the little money I gathered was about N570,000. I used it to start up a company called Jostrut Consult Limited. I put the money into the fabrication of what they called a dandle rig. It’s a smaller pilling ring locally manufactured and when this was done I called on people. We called the operators riggers and they have many years of experience like me. So, we formed partnership on this project.

By 2014, Jostrut Consult had grown, and today it has become a company that has over N500 million in both equipment and cash in the bank.

How can we harness productivity with talent and good attitude, considering the youth and young graduates who cannot work for free; are all you have said on career growth still relevant for the youths of today?

The problem is that some people have talents with good attitudes while some have good attitudes without talent. It’s a big problem for employers. Even the graduates that are being churned out yearly, are they employable? You still have to guide them to perform their duties.

I think mental laziness and sense of entitlement have become our culture. When I was growing up, due to the nature of my background, I did not expect anything from anyone, anything that I could not get on my own, I faced the music.

I know what it takes to climb that pedestal; anything I must get, I must earn it and go into what is called self-development. I have worked on several projects pro-bono (free of charge) because the first thing is to deliver value. But now, I can tell you what I am going to take.

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Most times you will be cheated, but one thing stands out and that is the experience you have garnered in the process. It cannot be taken away from you.

I have worked freely in several places, not only in Alimosho. I have worked freely in Banana Island. If you want to give me work in Alimosho and Banana Island, I will give consideration to the one in Banana Island, even if they are not going to pay me, because of the exposure and experience that I am going to gain therefrom.

For me, delayed gratification is access to experience, because the quality of materials that you will be exposed to when you work in Lekki is not the same as when you work in Alimosho or when you work somewhere in Ogun State.

Let me tell you this, after turning down the bank job, they gave me a job to build a bungalow. I turned it down too because that was not what I wanted. What I wanted, instead, was to have the needed experience to put up towers like 7-storey buildings, and to know when to call in professionals on the job as at when due.

It has always been my dream to provide shelter, giving people value for their money. I can tell you that we are the first development company in Lagos to actually have an apartment building on the mainland in Gbagada and we sold it out.

If you earn N90,000 as income and you have a dream of owning a building one day, what can you do with your N90,000 and what value can you add to it?

When I set up GMH Luxury, I was at a site in Ilaje Bariga. That time, I didn’t even have N300,000 in my savings and I wrote it down that, by 2014, I was going to start my own development. Though I could not start in 2014, I started in 2015 by buying land worth over N40 million.

I was able to manage the rigour through service mentality of rendering excellent service. When you have such mentality, money will chase you. I have never seen anyone that chases money and makes money, but when you chase excellent service, money naturally comes to you.

Notwithstanding the number of building collapse incidents in Nigeria and the cost of building materials, you have been able to distinguish yourself, what is your secret?

I will tell you this. Have I failed before? I will say yes. I believe that failure inspires winners and deceives losers. In my career progression, I suffered fatal failure where I lost a lot of money; I had to demolish 11 units of terrace houses in Magodo because they were built on a major canal. The canal lane was blocked. If you know Magodo and Magodo brooks, what is separating the two is a canal. Some people said it was land and they blocked the canal and our project was at the receiving end.

Because I know the force of nature, how water behaves, we had an option to either pull down the buildings or ensure the canal stays.

And since we don’t have control over the canal, we pulled down the buildings and lost about N370 million in the process. We lost that money but none of our investors lost because we relocated some and refunded some. Truth hurts, but we are not going to deliver a project that could not stand the test of time. We would not pass on a project that would not last, we would rather cancel it.

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In the cause of our eight years of running this business, we have had to cancel two projects as a result of environmental and foundation failures. These are the reasons we have high incidence of building collapse because they are trying to patch up and mend things. Nobody is going to give you what he doesn’t have. And as far as building collapses are concerned, if you look at them in recent times, they follow the same pattern.

Gone are those days when housing collapse happened only in the rainy season. Now we have multiple structures collapsing. It’s the high level of quacks allowed into the building industry that causes collapses. You see an accountant that wants to be an engineer.

It seems you had built some trust; did this pay off? Some people would have sold the structures you demolished instead of pulling them down?

Yes, trust has taken us this far; it has paid off. From N570,000 in 2010, we have grown our portfolio to over N30 billion in 13 years. That can only happen with trust and impeccable reputation. It has to be on the foundation of empathy. For instance, in 2020, I started a project and COVID-19 came in, followed by Naira devaluation and inflation. When I finished, I went back to the subscribers and told them that what they had paid could not finish that project. That I had added a certain percentage on the price based on the economic realities and they paid because we didn’t cut corners.

Real estate has been described as a conduit pipe for money laundering in Nigeria. How true is this and what is the way out of the problem?

Combating corruption and money laundering through real estate is a complex system. What we do is to ensure that we receive money through appropriate channels. If you want to buy into our project, you have to pay through a legal and transparent manner. With us, there are legal ways of making payment. Anything outside that, we will not be involved.

Going into housing deficit, the gap is huge; we have seen what India was able to do. In 2017 to 2022 they were able to deliver over 17 million housing units and they did it by giving subsidized loans to their citizens. The same thing was done in Brazil in 2009; it was also done in South Africa.

How can real estate be cheap when the facility available to the real estate developer, even the private investors, is about 30 percent of his construction cost? How can it be cheap when the cost of approval is growing?

We also have massive naira devaluation and 90 percent of finishing materials for real estate is actually imported. And the current dollar rate is nothing to write home about. So, it is a sector that the government really needs to pay attention to. The infrastructure available at the moment is over stretched, so the government needs to create new towns and consider the population, because there is no provision for population expansion.

Read also: From struggle to success: Alex Udeze entrepreneural journey in real estate

Poor mortgage system has continued to frustrate home ownership in Nigeria. What do suggest as solution to the problem?

The poor mortgage system in Nigeria has long been a barrier to achieving widespread homeownership and effective housing programmes.

High-interest rates, limited access to affordable mortgages and a range of challenges have frustrated the aspirations of many Nigerians to own their homes.

To address these issues and make homeownership a reality for a broader section of the population, a comprehensive approach is needed. To improve the mortgage system in Nigeria, the government can collaborate with financial institutions to offer more affordable mortgage rates. They can establish housing funds or subsidies to assist low-income earners with down payments. They should also implement credit scoring systems to assess accurately borrowers’ credit-worthiness.

They can also reduce bureaucracy and streamline the mortgage application process ; encourage private sector participation in the mortgage market. The government can strengthen regulations that govern the mortgage and real estate sectors. This includes creating legal safeguards, improving transparency, and ensuring that foreclosure processes are clear and efficient.