Two major devts that will shape real estate market in the new year
Although most real estate investors are still watching the new year and figuring out what is possible, especially with the elections on ground, there are carry-over developments from 2022 that will not only guide investment but also impact positively on the sector’s growth in the year.
When on September 23, 2022, the National Pension Commission (PenCom) disclosed that it has approved using 25 percent of Retirement Savings Account (RSA) balance for payment of equity contribution towards the residential mortgage, it was no small stir that erupted in the housing sector.
The approval was greeted with wild excitement as it was seen as a major shift in the obstacles posed on the way to homeownership in Nigeria. The demand for equity contribution has been the reason many Nigerians, especially low-income earners, cannot access mortgage to buy or build homes.
Debo Adejana, CEO, Realty Point Limited, describes this development as a game changer that will, according to him, impact hugely on the housing sector going into the new year.
“A very beautiful thing that happened in the out-gone year that will impact on home ownership is the 25 percent pension for mortgage that contributors can now use for their equity contribution; this will impact heavily in 2023 when it’s fully settled,” Adejana noted while reviewing the sector in 2022.
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Already, PenCom has approved 34 banks for the scheme. These include Abbey Mortgage Bank Plc, AG Mortgage Bank Plc, Brent Mortgage Bank, Cent age Savings and Loans, City Code Savings, Coop Savings and Loans, Delta Trust Mortgage Bank, First Trust Mortgage, FHA Homes Limited, etc.
Another development in the real estate sector that will have positive effect going into the new year is the introduction of Smart Homes into the sector. Recently in an interview, Olusegun Ladega, CEO, Interstate Architects, told property editors that technology has done well in the real estate sector.
Ladega highlighted how the Architecture profession has moved progressively to a point where the professionals are already creating intelligent homes that relate directly with both the occupants and the environment.
Adejana corroborated this, recalling that smart technology grew in 2022. “Smart home came into the market last year and the entry was phenomenal. A smart home does most of the common things human beings do in a home like opening the door without any contact,”
He added that things like tap running and light coming on without contact; showing details of visitors once they come into the house and many others are also done by a smart home. He said that a few of such homes are already in Lagos but found mostly in the luxury end or high-end hotel, offices, and residential properties.
According to Adejana, the introduction of technology into real estate got a serious boost such that more applications came into the market like how to search for houses, buy building materials, and manage estates in terms of power and due management account, adding that a good number of these technology received funding.
“Proptech came into the market, virtual reality also got into real estate this year. People don’t have to go to site physically; they can just experience digital marketing and 3D. Also, virtual real estate came in, people were buying virtual glass, properties in virtual spaces, leaving next to the celebrities of their dreams; It also helped people in buying and selling land,” he said.
He noted that, from research and reports, short lets really took off after COVID, pointing out that a lot of these things happened this year and have continued, just that now, it could be said that the industry is settling in a bit.
The out-gone year was not without its downsides. Besides the skyrocketing prices of construction materials which affected many construction sites, the year also witnessed incidents of building collapse which claimed lives. The Lagos State commissioner for Physical Planning lost his job as a result.