Millenium Group Chairman Eze Munachino says the Nigerian property market has greater prospects.
Munachino, who heads Nigeria’s leading property and general merchandise conglomerate, said the market had seen exponential growth in recent times and was still expanding.
The growth, he said, was a result of the secure investment opportunities created by the industry for many Nigerians, whose incomes were now diversified due to returns from their real estate assets.
He noted, however, that while investing in real estate offers countless opportunities, including financial prosperity and wealth creation, many challenges can limit an investor’s income and ability to invest.
Speaking further, Munachino revealed that one of the biggest challenges facing the real estate industry lately has been affordability.
He noted that with a growing middle class population, rapid urbanization and youthful demographics, Nigeria had all the key factors for real estate investment, regretting that financing and affordability remained issues for developers and future owners.
“Millions of Nigerians are struggling for affordable housing amid the housing boom,” he said.
Explaining the dynamics of the sector, Munachino said there are many ways to invest in real estate, but they all depend on similar economic factors to make a profit. “The first factor is that the property must appreciate in value. Also, the costs of owning and maintaining the property should not exceed its increased value,” he said.
Using the property market in Enugu State as a case study, he noted that the sector was characterized by over-inflated prices of properties for sale and for rent, but the actual value of the property was well below the rented or sold prices.
For him, affordable housing should meet the housing needs of low- and middle-income households.
“Affordable housing becomes a problem when a majority of the population is unable to buy homes at market price. It can be compared to what is happening in Enugu where less than 30% of its population can afford a standard house and at least 5% do not have access to housing,” Munachino said.
He said the implication of the development was oversupply with little or no demand due to exorbitant prices.
For most working residents of Enugu, earning power is generally low, making it nearly impossible for the average person to save to own a home.
He noted that people’s disposable income remained the main determinant of affordability and therefore it was incumbent on the public and private sectors to meet the growing demand for affordable housing.
“Enugu’s housing disparity reflects the huge economic divide in the state. Most residents who cannot afford these rents live in large numbers, leading to traffic congestion. Access to decent and affordable housing would provide essential stability to these families and reduce the risk of becoming homeless.
By revitalizing communities, building affordable housing, he says, could also help spur economic growth with a healthy mix of housing options, ranging from affordable and market-priced rental units, single-family homes, duplexes and developments for the elderly (seniors). ).
It would also allow all individuals to have the opportunity to improve their economic situation and contribute to their community.
He noted that in reality, the lack of safe and affordable housing was costing Nigerian cities in several dramatic ways.
“Cities that fail to provide affordable housing solutions drive away residents, lose potential workers and discourage the growth of their local economies. While those who already have secure and stable housing may not feel the true cost of poverty. The effects are real and can seriously harm our communities,” he added.
For him, high housing prices can slow down a local economy, leaving jobs unfilled and reducing a community’s purchasing power. But, when affordable housing is readily available, more opportunities become available to people at all income levels.
Apart from the price of land, he said that the ever-increasing prices of building materials and labor will drive up the price of properties.
But the above factors are where the government and the private sector, according to him, should shine their spotlight, if the desire of the government was to make the real estate sector much better for Nigerians.
All rights reserved. This material and any other digital content on this website may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without the prior express written permission of PUNCH.
Contact: [email protected]