Chief executive of COPEN Group of Companies and current National President, Real Estate Developers Association of Nigeria (REDAN), Mr Ugochukwu Chime has given insights on reasons behind the planned generation of national real estate database.
In an interview, he said the idea of the plan become pertinent considering the rampant location of estates in places that have no adequate population and building of houses that are either lower or much higher than the annual income of targeted occupiers.
He said “We saw that many estates in this country were sited in the wrong places. Some locations are not viable in terms of the number of people who buy a certain level of houses. Therefore, what we saw was that there is a need to have the integration of appropriate data of planning every aspect of the real estate investment; and if that aspect is not done, it will lead to a situation of mismatch.
“You may go and site a project for houses that would be sold for N10m in a state where nobody wants to buy a house of that amount or where the cost of renting a house per annum is as low as N100, 000 or N50, 000. So there is a problem. The global downturn we had in the economy in 2008 started from the real estate sector and because of that the people at the CBN realised that we could not progress without adequate data. We need to track the trend, the direction, the start-ups and other indicators in the real estate sphere as a means of tracking development in our fiscal operation and policy.
While observing that REDAN will like to work collaboratively, Chime gave reasons why many people cannot afford the houses being built by government.
According to him, “It is a cocktail of many factors. Let me start with the stakeholders; those who need the houses themselves. Many of us are unrealistic as to our housing need. We have done a survey and in the survey, one of the things we put in as a sample was: what kind of house do you want?
“You find somebody who cannot afford a duplex telling you he wants a duplex. His monthly repayment maybe N10,000. But he is looking for a house that would require N150,000 monthly for repayment. So, one of the key things that we need to do is educate ourselves to know that there is no more free money for housing development; you have to pay for what you are asking for. That is a critical thing.
“The second thing is to look at the core centres involved in the development of those houses. Find out which area to touch. That something is costly is as a result of input factors which determine the output factors. We need to look at the cost of building materials; look at the cost of access to land; cost of financing; the cost of compliance – approval fees, registration of titles, and other contingencies. These add up eventually to the cost of affordability.
“Therefore, it is not an issue of Federal Mortgage Bank of Nigeria; it is not an issue of the developers; it is an issue of sitting down and finding out where we are getting it wrong and why we are not getting an effective demand not desire, like they say in economics. Anybody can desire to have anything, but what you demand should be within the ambit of what you can pay for.