‘Estate agency regulation will eliminate quacks’
CHIEF KOLA AKOMOLEDE is the past president, International Real Estate Federation, (FIABCI) Nigeria. He was also a former secretary-general, Association of Housing Corporation of Nigeria. He spoke with VICTOR GBONEGUN on why the government should develop i
opening sentence. The area of compensation is not equitable; the method of valuation prescribed there isn’t good for the public. The law also doesn’t provide for adequate compensation if your land is taken. There is also no compensation for bare land if taken except grant rent and this why banks don’t accept bare land as collateral for loans unless there is a building on it.
The law also said you can’t have more than a hectare of land in an area. With that it means all developers that have more than a hectare, is a violation of the law. These are things nobody has challenged. erality of the people and even till today, the attitude has continued. Shehu Shagari, and Lateef Jakande era were the administration that took housing as a priority. In-fact, Shagari campaign slogan was ‘Food and Shelter’. Shagari built houses in all local governments of the federation; unfortunately, politics and corruption marred the project. At the state level Jakande built houses at prices the people could afford.
Government getting out of participation in housing doesn’t work in the third world. If you take council housing out of the houses in London, the whole place will be empty.
The first issue is government not taking housing very seriously, the second is finance, there is no mortgage system that can enable the public to buy house, the cost of acquiring land is so much and even documentation is a lot of problem. It takes years to get your consent to transfer title on land and you have to pay between 10 to 15per cent of the cost of land. Cost of construction is so high especially with high exchange rates and with all this problems; you can see that the common man can’t have a house.
We are not saying build houses for the people free, money given to the ministry of housing can be recover because if you build houses, you will sell it and the money will come back. The demand was high and prices went up unreasonably but now the situation is normalizing. Prices of property are now settling down to their real value. It will take time for things to stable and if at the end we are able to normalize the situation, it will be good for the country. If the economy can settle and there is less corruption for people to pay the real value for property either as rent or purchase of house. Government should take enough interest in housing like they are focusing on health, education and transport. It is only food that is more important than housing.
People in government who steal money after buying cars, the next thing they buy is housing. Create a robust mortgage system where people can have access to taking a loan to buy or build house. That will improve the housing situation in the country.
In Nigeria if you get an interest rate of 15per cent, you are lucky, it’s between 18, 20 and above percent, that is no mortgage. The problem is that if you collect money from depositors and you don’t pay them high interest rate, then you will have no more money to give out. A solution to this was devised by introducing the National Housing fund but unfortunately, it is not been implemented. The ideas was that depositors will get loan at 3per cent and the money would be given to primary mortgage banks at 4per cent and then they can lend it out at five or 6per cent to have something similar to what operates abroad.
The alternative is for government to vote in money every year like N100billion for housing mortgage and if government does that for ten years, they won’t need to put in more money because as people are collecting and paying back, it keeps increasing. When funds are available to mortgage companies at low interest rate, then, they would be able to give it out at low interest rate. Any interest that is above 9per cent is not good for housing.