Countries across the globe have harnessed the profitable opportunities presented by the real estate industry to boost their economies and broaden their financial resources. With Urbanization on the rise, population numbers soaring, and housing demands increasing, Nigeria’s bustling Real Estate market is primed for substantial growth. Nevertheless, the industry’s progress is hindered by issues such as ambiguous or damaged property titles, high prices of available real estate, bureaucracy, superfluous and preventable Infrastructure shortcomings and a deficiency of openness and effectiveness, among individuals that engaged in dealings and government.
To fully unlock Nigeria’s real estate potential, significant reforms are necessary in policy, legal, regulatory, and financing structures. By adopting a legal framework similar to Dubai’s real estate market, Nigeria can enhance structure, standardization, development impact, and financial returns. Dubai, within the United Arab Emirates (UAE) , stands out for its advanced real estate legal framework, paving the way for its emergence as a sought-after global real estate hub. The UAE’s real estate regulations are instrumental in its success as it is tailored to allure foreign investors, safeguard investor interests, and uphold market transparency.
Elements of the Dubai model can be implemented in Nigeria.
One of the standout features of the emirate’s real estate laws is the Freehold ownership for foreigners established in 2002. This groundbreaking move allowed non-citizens to own property in specific zones, making the emirate a pioneer in the Gulf region in this aspect. Others include the establishment of the Real Estate Regulatory Agency (RERA) in 2007; the requirement for escrow accounts for off-plan property sales; a comprehensive real estate registry that documents all property transactions; the Rental Disputes Center, offering an efficient mechanism for resolving conflicts between landlords and tenants; investments protection; exempting individuals from income, capital gains, or property taxes; and granting long-term visas (lasting up to 10 years) to investors, entrepreneurs, and professionals who own property.
It is worth noting that the Dubai real estate sector policies have witnessed significant success due to a smooth collaboration between the government and its people, resulting in substantial progress and profitability. In contrast, Nigeria faces numerous challenges with implementing reforms, mainly due to a lack of practical adherence to legal regulations. Despite its intrinsic law adherence challenges, Nigeria has the opportunity to adopt elements of the Dubai model in order to revitalize and harness the vast potential of its real estate industry.
Creating a thorough legislation for the industry would be advantageous.
Nigeria has the opportunity to promote free Trade by creating a national real estate regulatory body similar to RERA. This regulator would collaborate with state governments to set and uphold industry standards, offer title assurances, address conflicts, oversee state agencies, and simplify the complex approval procedures. Creating a thorough Legislation for the industry that includes protections for consumers, standardized project approvals, fair contracts between buyers and sellers, efficient dispute resolution methods, and clear transaction guidelines would be advantageous for the nation.
Simplifying land title mechanisms in Nigeria through a National Titling Bill can result in substantial benefits. It is important to establish timelines for land agencies to digitize and integrate title records across states to ensure transparency and efficiency. In addition, financial reforms are necessary, including promoting public-private partnerships by involving Pension funds, Insurance companies, and foreign Investment in the industry through revised asset allocation guidelines. Implementing fail-safe risk mitigation tools, and establishing a comprehensive mortgage liquidity program to provide competitive rates and benefits for long-term home financing are also essential for sustainable development.
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Encourage the creation of Affordable Housing in both urban and semi-urban areas by offering targeted incentives for collaborative efforts between private and public entities. Implementing these policy adjustments could lead to higher quality standards, greater involvement, and increased investment in the industry within the next 3-5 years. The success of Dubai serves as a powerful reminder of how effective leadership and supportive business environments can have a transformative impact on the market. Our environment presents a favourable opportunity to achieve similar success by focusing on the essential elements.