· But asks if the time to heal is now?
By Ignatius Chukwu
Many did not know why several estate development gurus ran into trouble in the past seven years.
Japa destroyed over 30 per cent of the industry and caused crisis as those leaving Nigeria put their building up for sale. Diaspora remittances dried up and the housing sector suffered. Read the expert for insights…..
A real estate developer, MY-ACE China, popularly called Mayor of Housing has given an account of the turmoil the sector suffered under the outgoing Muhammadu Buhari administration.
He said his experience was the industry experience drawing from the micro-economic situation in the country.
He recalled that inflation went to double digit and the food sector was the highest hit because farmers could not go to the farms. “People could not travel freely. Travel moves the economy, and when this fails, the economy slumps.”
He also recalled another major phenomenon, insecurity. “Insecurity caused capital flight, Diaspora people stopped sending their money, Dollar became scarce and this led to direct price of the exchange rate. Every commodity in the world became very expensive to Nigerians.”
The Mayor of Housing said it had huge impact in the property, it affected the industry very much because of off-takers (property buyers).
He explained thus: “30 per cent of our off-takers of houses are Diaspora Nigerians. In the past eight years, that shrank down to below five per cent because they lacked confidence in the economy plus insecurity.
“Rather than Diaspora remittances, we rather saw emigration of professionals from Nigeria. Mos of them had houses and they were selling out, putting their houses on the market.
“Instead of having more buyers, we had a glut. That affected developers very badly. In fact, many developers went into problems. Many of the big names we did not think could go into crisis went into crisis, almost into bankcruptcy. People who paid for houses could not get them.”
He said the demand for estates went down, and Diasopora investments went down. “Another factor was that prices of building materials went up so high that the money won’t build the house.
“You had the conundrum of whether to go back to the customer for new prices or to try to deliver at a loss. There was a lot of tension in the industry. That affected the industry much. The next is that people bought massive lands for agric in the hinterlands and inner village ands. Because of insecurity, nobody can get to those lands. That added to the slump.”
Generally, he stated, confidence in the business in the past eight was very low; insecurity is very house, motivation is very low, and the property industry was worse hit.”
He however said the good news is that there is an incoming government. “If they can restore security, confidence and economic confidence, there is a boom waiting to happen in the housing and real estate sector.
“The question is, can we find that government that will do this.”