With housing deficit that has continued to exacerbate yearly, real estate expert and MD/CEO, Country Hill, Adewale Oshinaike has advised the Federal Government to provide bailout funds to real estate practitioners to build houses to bridge the deficit. Osinaike discusses these issues with Fadekemi Ajakaiye
Real Estate is not a business that brings immediate profitability, what prompted you to start the business?
I have been in the real estate industry for over 10 years now. I joined a Real Estate Investment Company where I worked as a Sales person on contract earning N30,000 monthly. About 200 sales agents were employed at that time working for the Real Estate Investment Company, but as time went by, we started reducing day by day. After a year, we were only eight that remained as sales agents. Some were sacked; while others left because they could not meet the targets and all sorts.
I left Real Estate Investment Company for another Real Estate Company, and learnt another dynamics of in the industry after joining them. The company had collected funds running into billions of Naira and was unable to pay the people the agreed returns and their principal sum. I was the Conflict Resolution Manager; saddled with the responsibility of resolving all land conflicts that company had. When I saw all the conflicts that the company had; I ran away because I knew that those issues cannot be solved, because they were so huge. Before starting Country Hill, I rose to become a Business Development Manager and Conflict Resolution Manager at the different companies where I worked.
You read Sociology at the University of Calabar, why did you go into Real Estate?
In sociology there is what we call rural and urban development, the rural and urban development is how we develop the rural areas and enhance the urban areas, how else do we do that if not through real estate? If you look at what is happening in our society today, you see houses jam-packed, people live in a kiosk, some are homeless and sleeping under the bridge, these are things that cause insecurity in our environment. My knowledge of sociology helps me to bring innovative solutions to the Real Estate market. Part of the practice is what we are doing at Country Hill, helping people to acquire affordable properties. We have areas that are developing, we make the necessary investment needed to developed area and we sell these properties at affordable rates to Nigerians. Being a sociologist and real estate expert today is not by my own plan. The idea is simply to help people afford luxury.
Do you think affordable housing is possible in Nigeria?
When I say affordable luxuries, you would hardly see any estate company in Nigeria that is not expensive. The government needs to put in place an effective mortgage system that works in Nigeria, so that the common man can afford it. Affordable housing is possible in Nigeria. If most real estate companies can take their minds off immediate gratification, affordable housing will be achievable for all. In our own case, we have provided over 4,000 plots of land for people to build houses. Are we looking for profit now? Maybe that's why we are in business, but not so much profits, but for us to position ourselves to make things affordable for people.
You can't put everything on government; as government can't provide everything and that's why we are more concern about infrastructure in all our estates. Our estate in Magboro has tiled roads network, drainages, ambulances and pharmacy. In fact, we are working on an independent power supply system. If I take over 500 units of houses off the national grid and put them on an alternate power supply system, it will mean a lot to us and we would have solved some problem for the government. We all cannot depend on government.
Nigeria's housing deficit is put at 22 million units with huge part of it in Lagos, Port Harcourt and Abuja. What do you think government should do to reduce the huge number?
Housing deficit is Nigeria is real and it is increasing every day because there are lots of people moving into the country. In Opebi and Ilupeju alone, 10% of people living in these places are Chinese. Lagos is filled; people are now moving to Ogun state, also in Abuja, people are now living in Nassarawa. Since government is giving permit and visa to foreign nationals; the question is; have we proved housing for these in-flock in our urban cities? The answer is no.
Lagos state has done fantastically well in the last eight years. The Government have done various allocation to Real Estate Companies to develop new areas and settlement but at a cost that most of them still struggle to pay. Thus; only those who can afford those housing schemes get those allocation and sell to the end users at a premium which most cannot afford. The Ilubirin project, the IBILE homes and of projects are ongoing but most civil servants might not be able to afford it if a proper mortgage system is not in place for them.
Government should provide bailout fund for local investors to build, sell and return the capital to the government after some particular years. Government should also create policies that will allow foreign investors to invest in real estate also. That kind of fund can help to solve the housing deficit in the country.
In Dubai, government gives private companies funds to build houses or give them land if they know that the company has money to build houses. The houses are more than the people who live in Dubai and they are still building. Such ideas attract investors, visitors and tourism.
Why do you think we don't have foreign investors in real estate as we have in technology?
In the last four years, we have not had a major real estate Investment in Nigeria because of instability in the economy. I was in Dubai sometimes ago to speak some investors, what those investors were asking includes the following: Why are Nigeria banks refusing to provide capital needed by Real Estate Companies for proper development of the sector? They were saying I should letters of credit and bank guarantee, but when you bring bank guarantee to your local bank, the bank will tell you to bring certain percentage of the money those investors want to give you as , if I have that kind of money, why do I need investors or even go to the Banks in the first place? The truth is that the foreign fund there, it's just for us to access it. There are bottlenecks in Nigeria that will not allow us to access it, they will be asking you to come to Abuja today and tomorrow.
Government is not providing suitable environment for foreign investors to invest in real estate in Nigeria. There are many government policies that are hindering this development. Local investors don't want to bring its money out. Even if they bring it out, at what interest rate do they want to bring it out?
What role is Country Hill playing in providing affordable housing markets for Nigerians?
At Country Hill, we are positioning ourselves to be able to provide four thousand units of properties. If we can provide that out of the 22 million housing deficits in the country, it means that we have done our part. In our Paramount Residents and Gardens in Magoro, we are having 50 units with terraces, 100 units that are 150 bungalows and lands for private developers which is about 320. In Shimawa, we are providing over three hundred units three-bedroom bungalow.
Imagine if you are buying a standard three-bedroom bungalow for 8 million Naira and pay for 5 years or more. In Agbara and Epe we are also having the same structure. In total, we have Olive Gardens Ibeju Lekki, Shimawa, Agbara and Epe, Paramount Resident and Gardens Magboro, Lily Gardens Shimawa, Country Court Imedun, Ibeju Lekki, Victoria Court Imoke, Ibeju-Lekki, Paramount Residences and Gardens Igando, Ibeju Lekki. These Estates are positioned to help reduce the housing deficit in Nigeria as a whole.
How would you advise the government to provide affordable housing for people, most especially low-income earners?
Government should be careful in making policies. The policies they want to create should not disrupt innovative solution in the society. We should make effective policies that will positively affect the life of the people. They should make good policies and provide infrastructure that will allow people to invest in real estate without any fear. Government agencies are not helping matters.
Regulatory framework should be too cumbersome to manage. One agency should be able to handle most of the issues on land and housing matters in Nigeria. Duplication of function means we pay more to these agencies and government might get more revenue but the end users get to pay more for things that are readily affordable due to government financial demands.