Financial expert, Wale Ariyibi, worried by the impact of economic policies on the sector has urged professionals across the built environment to form an advocacy group to seek improved funding for real estate projects in the country. He lamented that the biggest problem affecting the sector and home ownership is the high-interest rates charged by financial institutions, which oftentimes are to the detriment of developers, independent builders and housing investors. Ariyibi, who is the Chief Financial Officer, FBN Holding Plc, spoke at the yearly general meeting organised by the International Real Estate Federation (FIBACI), Nigeria chapter, in Lagos.

He observed that in the past three years, the Federal Government improved on funds allocations for the manufacturing and agricultural sectors as well as allowed operators to get loans at single-digit but neglected the real estate sector, which is also crucial to national development.

Speaking on “The impact of monetary policies on real estate sector in Nigeria”, Ariyibi explained that potential risks in a monetary policy position in the country include rising building costs stemming from domestic and imported inflation, foreign exchange scarcity and supply chain disruptions.

High-level policy direction over the years, he said, impacts key pockets of the Nigerian real estate market from commercial to the residential segment in the macroeconomic and finance perspectives.

He said the risks also include rising labour costs and the scarcity of skilled labour, which results in the suspension of projects. Also, escalating costs and changing documentation requirements following changes in policy are other risk factors.

Ariyibi said about 30 per cent of the 200 million people in Nigeria still struggle to have quality shelter. He encouraged professionals such as architects, quantity surveyors, builders and others to collaborate and advocate for improved fund allocation to the housing sector.

“No developer in the country is building 1, 000 housing units yearly. There is a deficit in real estate supply because small-scale enterprises cannot rent high-rise buildings due to high costs. The mitigating options include leveraging prefabricated building, increase in joint venture projects, boosting local capacity in building through colleges and trade centres and effective stakeholders management to keep abreast of changes and track documentation modifications.”

The President, FIBACI, Nigeria chapter, Mr. Adiele Adeniji reiterated the importance of collaboration among professionals for the housing sector to thrive and overcome its multi-faceted challenges, including restricted access to funds. He noted that last year was very challenging for practitioners, families and businesses due to the negative impacts of the COVID-19 Pandemic.

According to him, despite the challenging times, FIBACI was able to improve its advocacy programmes, worked with other allied professionals, increased membership, launched the property scorecard and groomed young professionals in universities, colleges and institutions. He also thanked members for their unalloyed support for the leadership of FIBACI in Nigeria.

Earlier, the World President of FIBACI, Susan Greenfield said irrespective of global economic challenges, FIBACI Nigeria has remained steadfast in its activities by adding benefits and values to members and focusing on grooming young professionals.

She lauded its leadership and urged the executives to carry on with the good works started by their predecessors.