Expert advocates funding intervention for real estate as costs soar

For reasons bordering on rising energy and building materials costs, a funding intervention from the federal government has been advocated for the real estate sector for enhanced homeownership.

Oyewale Ariyibi, chief financial officer at FBN Holdings, who advocated the intervention, explained that since the government has intervened in manufacturing and agriculture by pumping money into the sectors, it should do the same for real estate.

Ariyibi was a Guest Speaker at an annual general meeting hosted in Lagos recently by the International Real Estate Federation, Nigeria Chapter (FIABCI Nigeria) where he spoke on the ‘Impact of Monetary Policies on Real Estate Sector in Nigeria.’

“For the past two to three years, the government has focused on manufacturing and agriculture and they ensure money is pumped into those sectors. There are different structures today that enable operators in manufacturing and agriculture to get funding and that is facilitated by the CBN.

“So, I think what should happen is that operators in this real estate sector need to come together to form associations as builders, architects, developers among others, to put up a formidable advocacy to ensure that the kind of money that has been pumped into agric and manufacturing is also pumped into the real estate sector,” Ariyibi advised.

He, however, said that the sector should expect more housing-related interventions from the federal mortgage bank of Nigeria (FMBN) to help bridge the housing gap while housing schemes are to evolve and adopt a more flexible rent-to-own home-ownership model.

Ariyibi projected that cost of building materials would remain high following double digit inflation rate and local currency depreciation. He noted that real estate was the biggest investment in the world, adding that the high interest rate was a major challenge in the sector.

In her presentation at the event, Temilola Sonola from the International Finance Corporation (IFC) EDGE, highlighted the need to start building green, explaining that green buildings are generally 20 percent more energy efficient than normal buildings just as they are also 20 percent water-conservative.

“A lot of people are building but they are not building green. There is need to start building green considering the environment. When we talk about green building, we are talking about energy use, water use and others,” Sonola said.

The association used the occasion of the AGM to elect new officers that will run its affairs in the next two year. Those elected are Gladstone Opara, Akin Opatola, Ayodele Olamoju, Tolu Dima-Okojie, Bawa-Allah, and Alfred Osagie as President, Vice President, Secretary General, Treasurer, Publicity Secretary, and Assistant Secretary General, respectively.

Adeniji Adele, immediate past president, commended the achievement of the association despite the challenging period of Covid-19, which he listed as increased membership, advocacy; creating awareness in the building industry, and partnerships.