Mr Temitope Runsewe is the Managing Director, Dutum Properties Limited. In this interview with DAYO AYEYEMI, he speaks on various challenges confronting the real sector, the emerging trends and how to address the issue funding.
What has been the emerging trend in the construction of real estate?
One of the things we have been seeing is that most of our work is providing construction services in the residential area. So that means there is heavy demand for residential buildings. What this means is that a lot of our clients are also looking for faster way to deliver their products to their clients. This made us go back to the drawing board to start researching on emerging technology that we could bring in and make our work faster and more efficient.
Also, one of the trends we have seen is the need for being more climate friendly, and so we have a lot of talks this year about building cleaner and housing edifices because of the environment.
This is becoming a major issue and everyone in the sector is now paying attention to this.
What can be done to enhance home ownership among Nigerians while attracting investments to the real estate sector?
There is the need to develop a thriving mortgage system in the country. Apart from this, government needs to fix the economy, fix inflation and the falling naira.
There is a lot of potentials in the real estate sector. As a matter of fact, I believe we have not scratch the surface of the potential in term of what is achievable in real estate.
The reason for that is because, being an emerging economy, you can always take a queue and tips from other countries that have gone ahead and see the process they have gone through and where they are presently.
When you look at the gap where we are presently and where we are going, you know that, definitely there is a lot of room. For example, Nigeria still does not have a thriving mortgage system, and anywhere in the world the mortgage system is what grown the real estate sector.
In a situation where right now you want to buy a house in Nigeria, I believe over 70 to 89 per cent of the people have to look for 100 per cent cash to buy the houses. Anywhere in the world where the economy is developed, you don’t need more that 10 to 20 per cent of the amount and you will own your house. So imagine the multiplier effects that will have the moment we have a thriving mortgage sector.
In the same vein, because of that, it means we cannot build too many houses because there are no enough people to buy them even though there is a gap. They talked about 20 million gap, but in reality, how many people are able to afford to buy the house. That is the area that needs to be resolved and I believe as the economy continue to grow and develop and we have organisation like the Nigerian Mortgage Refinance Company (NMRC) and the rest of them, then the mortgage sector will grow and definitely real estate sector will grow
How can we address the issue of funding in Nigeria?
When it comes to funding, it has a lot to do with the macro-economy and inflation. There is a policy of the government, starting with Central Bank of Nigeria (CBN) and Ministry of Finance. When you have stability of your currency, Foreign Direct Investments (FDI) will come in. The truth of the matter is that a lot of funding that we need is likely to come from abroad. So you need to build the confidence of the international communities that you have a stable economy and currency. In actual fact, I was look at a draft 50 days ago and I saw how the naira performed in lieu of different CBN governors. There was a lot of stability during the time of Sanusi as CBN’s governor, when dollar did not move beyond a few per cent. There was a lot of FDI during the period.
What did they do right at that period?
At that time, people were confident that if they bring in money at X amount, it is not going to change so much. So that is an area that is completely out of our control. It is essential if we can get our economy and naira stable. We will have a lot of money coming in because the country is ready for investment, but nobody wants to bring in their dollar at N240.00 and in two years, it is N1000. It wipes away all your profits. It also wipes away all your projections. But if we can get that right, it will make a lot of differences. We have people, we go for conferences all over the world, they want to bring in money to Nigeria, but they will not bring in that money, even I will not collect that money because it will be difficult to pay back if we fail to get the economy and our naira stable. If we fix these identified challenges, there will be a great multiple effects on the housing sector.
What is the outlook for housing in 2023?
Interestingly, normally when we are going into an election year, we normally have slow down. However, I think this election year seems likely different. I think the elections actually put up a lot of hope, and for that reason, we are seeing activities just moving at normal speed. This is because people believe that a change right now is good for the economy. So the outlook is very positive. We expect that 2023 will be a good year for the real estate sector as well as the construction sector.