There has been a call from the Nigerian Institution of Estate Surveyors and Valuers (NIESV) members for the need to reassess the applicable ethical standards to correspond with the evolving technological changes and the demands of public institutions in conducting business. They also advocated for incorporating risk identification, analysis, avoidance, reduction, and management procedures within the framework of real estate development feasibility and viability evaluations. The estate surveyors and valuers, who gathered at a Mandatory Continuing Professional Development (MCPD) organized by the Abuja branch, noted the need of ensuring proper land titling, including obtaining a Certificate of Occupancy, for real estate development.
They also aimed to raise more awareness among the government and general public about the importance of involving members across the real estate development value chain and improving the mortgage foreclosure law. Experts highlighted the financial challenges faced by real estate developers, such as the significant difference between the official reported lending rate ( nearly 18%) and the actual lending rate ( more than 30%). This discrepancy, along with the high interest rates, poses difficulties for developers who require long-term funds with low interest rates for real estate development.
Real estate market is experiencing a surplus of available properties.
Furthermore, they stressed the importance of utilizing sustainable, long-term funding sources with single figure interest rates. It was pointed out that the real estate market is experiencing a surplus of available properties due to the impact of high interest rates and the inadequate accessibility of funding for potential buyers, resulting in a substantial number of unsold properties. Adebanjo Adeleke, Chairman of the Abuja branch, highlighted the main obstacles to real estate financing in Nigeria, which include the limited capacity of mortgage and commercial banks.
Other cited contributing factors to the current state of the housing market are high mortgage interest rates, challenges in approving and receiving mortgage loans, an un-securitized capital market, and challenges in gaining property titles. These challenges, he said, could hamper the real estate industry’s progress, and noted that effective business strategies are needed to overcome the hurdles and discover new, creative solutions. Adeleke encouraged the attendees to utilize the opportunity presented by the program to learn more about estate surveying and enhance their knowledge.
Long-term funding with low interest rates is necessary.
In particular, he stated that they should enhance practice on valuation and property development in order to address issues embedded with limited resources and challenges of land titles. In his address on the theme ‘Business Strategies in Curbing Financial Constraints in Real Estate Development’, Adetunji Adeniran, the Registrar of the Council of Registered Builders of Nigeria, explained that at the current standard interest rate of 18.75 percent, no offer amount borrowed could offer sufficient resources for investing in real estate.
Adeniran noted that in addition to the difficulties posed by high interest rates, there is also the issue of loan duration and available funds being predominantly short-term. He explained that real estate development necessitates long-term funding with low interest rates. According to him, there are additional challenges such as the high expenses involved in production and a lack of comprehensive knowledge about the market. In addition, Adeniran pointed out certain business strategies to improve and advance real estate development.
Adopting business methods will help estate surveyors.
The strategies include having a firm understanding of the fundamentals of accounting and finance, being familiar with the concepts of entry, exit, and returns, classifying and monitoring to spot underperforming assets, and acting swiftly to sell off or otherwise dispose of the asset in the volatile market. Dr. Emmanuel Mark, Chairman of the National MCPD Committee, has noted that by adopting real estate development business methods, estate surveyors and valuers can withstand the current economic depression and emerge stronger. Johnbull Amayaevbo, president of NIESV, urged attendees to put what they learned to use in improving the practice and property development in the country.