Experts, practitioners and other stakeholders in the real estate sector have converged on Lagos to discuss the way forward, post-COVID-19 for the industry.The event, which held under the aegis of the Lagos State Real Estate Regulatory Authority (LASRERA), examined ways to develop effective models and minimise trust deficiency in real estate transactions. ASST. EDITOR, OKWY IROEGBU-CHIKEZIE, reports.
Stakeholders from the various sectors and experts from across the globe have met at a parley in Lagos to fashion out a robust policy for the sector.
This is to give teeth to the Lagos State Technical Committee on Real Estate Regulation.
The Special Adviser to Governor Babajide Sanwo-Olu on Housing, Mrs Toke Benson-Awoyinka, put the issue in perspective, when she said it was pertinent to create a robust housing policy with stakeholders, especially with the advent of COVID-19.
She stated that the committee’s mandate was to design a policy and fiscal framework to institute and promote global best practices in the state.
She noted that the policy emanating from the meet would curtail the malpractice in the real estate sector and improve financial transparency and fiscal responsibility.
According to her, the committee’s mandate is in line with the state government’s agenda of transforming the state into a 21st Century model of effective and efficient governance.
The special adviser stated that the committee, which constitute of team leaders of diverse talents and expertise, was charged with addressing the challenges in the sector, with particular attention to reforming the Home Ownership Model, to increase housing stock and reduce deficit.
Mrs Benson-Awoyinka said to find lasting solutions to the challenges in the sector, the committee would be required to set up a comprehensive system and framework for resolving financing.
According to her, the team would create a trusteeship for the management of real estate remittances for off-takers, and a system to stagger payments to developers where off-plan payments are applicable.
“The committee will set up a governance structure which will oversee the entire real estate framework and stakeholders’ engagement in the state, to minimise trust deficiency.
“It will be responsible for the centralisation of insurance management for all real estate assets, which will dovetail into the Lagos State risk management framework, to further boost confidence and safeguard investment.
“The team will create and implement Strata Title Law, to drive revenue and encourage the revivification of unused capital in the state, as well as improve accessibility to housing for citizens.”
Mrs Benson-Awoyinka noted that the team would transform the state into a pacesetter for financial growth and inclusivity using real estate as a channel for its citizens in Africa.
The Commissioner for Finance, Lagos State, Mr Rabiu Olowo, said Lagos is the only state that has country status. It attained the status, according to him, due to its primary roles in advancing the economy and West Africa region.
He said: “Like other mega cities in the world, housing has been one of the critical pain points in Lagos State. This challenge called for a well- thought roadmap to enable the government understands the real estate ecosystem and this is the basis for constituting the Lagos State Real Estate Regulatory Authority.
“In modern cities like Dubai, where real estate accounts for 20 per cent of its GDP (compared to an average of seven per cent in most other countries). This statistic calls for a revisit of our real estate model and possible re-appraise our assumptions in other to improve our contribution to the economy.
“The real estate sector in Nigeria is yet to grow to the level of making impact on the growth of national GDP. The reason is not far-fetched. It is because the secrets of the sector is yet to be explored by both the investors and the government to help harness the potential to the benefits of the nation.”
He said theme of the eevnt Transparency and governance in the real estate sector had become very crucial, considering the increased reported cases of fraud and unethical practices by some real estate practitioners/property developers in the sector across the state.
According to him, the National Bureau of Statistics recently put real estate contribution to Nigeria’s GDP at 7.5 per cent, a figure that left many stakeholders surprised at what they described as a very poor rating by the body.
“The current Global Real Estate Transparency Index Survey carried out in 2020 rates Nigeria poorly as number 68 out of 99 countries with a score of 3.74 per cent as against United Kingdom as Number 1 and a score of 1.31per cent . South Africa remains the only country with a positive real estate transparency index in Africa ranked number 24 with a score of 2.37.”
To plug the housing holes, the World Bank in its 2014 study stated that N59. 5 trillion would be needed at N3.5 million per unit he stated.
According to him, in Lagos State, the statistics shows that the contribution of real estate to the state GDP stood at N242billion, representing 2.01per cent of the state GDP which is very low.
He argued that the Lagos State Real Estate Regulatory Authority’s role in the real estate sector transcends regulatory and policy making, the focus of this agency is to help rebuild the lost confidence, improve transparency and governance and create a saner real estate ecosystem as it affects on and off plan investors
He implored stakeholders in the industry to work as a team in transforming the sector in the state to become one of the best across the globe.
Olowo said the initiative of the committee had strategic broad responsibilities with its focus on improving financial transaction and building internal and external investors’ confidence.
He stated that the introduction of a real estate trustee to help manage off takers – investors funds and gradual re-imbursements to real estate developers would reduce the overbearing exposure or risk investors face in the industry.
The finance commissioner noted that the subscriber’s funds would only be accessible to developers upon approval from the trustees and the government.
According to him, the required approval will cover both quality of deliverables and milestone.
“Transparency and governance in the real estate sector has become very crucial considering the increased reported cases of fraudulent activities and unethical practices by some real estate practitioner/property developers in the sector across the state,” he said.
Also, the Attorney-General of the State, Mr Moyosore Onigbanjo, said LASRERA was set to do great things in the sector, and that is why it had gathered experts in areas such as finance, law, real estate, among others as members of the committee.
The task of the committee, he said, is beyond the state because whatever it does, has a ripple effect across its borders.
“As the Attorney-General of the state, I pledge that the state in partnership with other stakeholders will provide the right regulatory framework for real estate transaction.
Inaugurating the committee, he said:“We want to see an end to the weird real estate practice presently in place in the sector,” adding that investors were protected.
Some of the members of the team are: Olowo, Onigbanjo, Mr Babatunde Obaniyi of United Capital Trustees; Mr Kayode Omotoso of Mortgage Bankers Association of Nigeria (MBAN) and Mr Afolabi Balogun of Libra Law Offices.
Also included are: Mrs Funmi Ekundayo of STL Trustees; Mr Kehinde Ogundimu of NMRC; Dr Roland Igbinoba of Pison Housing; Mr Bisi Onasanya of the Address Homes and Mr Femi Adewole of the Family Homes Fund (FHF).
Others are: Mr Owolabi Salami of Oaks Insurance Limited; Mr Demola Sogunle of Stanbic IBTC; Deji Adeogun of Philips, Charles, Anthony Legal Practitioners.