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Experts explain how monetary policies affect the real estate industry.

July 14, 2022, 11:19 pm News Seen: 15
Experts explain how monetary policies affect the real estate industry.
Financial expert Wale Ariyibi has urged professionals in the built environment to join an advocacy organization to seek better funding for real estate projects in the nation because he is concerned about the effects of economic policies on the sector.

He bemoaned that the most serious issue hurting the sector and home ownership is the exorbitant loan rates levied by banking institutions, which frequently work against developers, independent builders, and housing investors.

Ariyibi, the Chief Financial Officer of FBN Holding Plc, spoke at the International Real Estate Federation FIBACI, Nigeria chapter's annual general meeting in Lagos.

He remarked that, over the last three years, the Federal Government increased funding for the manufacturing and agricultural sectors and allowed operators to obtain loans at cheap interest rates, but ignored the real estate industry, which is similarly critical to national development.

Speaking on "The Impact of Monetary Policies on the Nigerian Real Estate Sector," Ariyibi noted that potential dangers in the country's monetary policy position include growing building prices due to domestic and imported inflation, foreign exchange scarcity, and supply chain disruptions.

According to him, high-level policy direction over the years has had an impact on major areas of the Nigerian real estate industry, from commercial to residential, from a macroeconomic and financial standpoint.

He added that concerns include growing labour prices and a lack of competent labour, which causes projects to be halted. Other risk factors include rising prices and changing documentation requirements as a result of policy changes.

According to Ariyibi, over 30% of Nigeria's 200 million inhabitants still need adequate shelter. He urged architects, quantity surveyors, builders, and others to work together and fight for increased funding for the housing sector.

"No developer in the country builds 1,000 dwelling units per year." There is a shortage of real estate supply because small businesses cannot afford to rent high-rise structures. Mitigation methods include utilizing prefabricated buildings, increasing joint venture projects, increasing local capacity in building through colleges and trade centres, and good stakeholder management to stay on top of changes and track documentation adjustments."

Mr Adiele Adeniji, President of the FIBACI Nigeria Chapter, emphasized the necessity of professional collaboration for the housing sector to prosper and overcome its multifaceted issues, including limited access to finances. He stated that the harmful effects of the COVID-19 Pandemic made last year extremely difficult for practitioners, families, and companies.

Despite the difficulties, FIBACI was able to expand its advocacy programs, collaborate with other associated professionals, increase membership, create the property scorecard, and train new professionals in universities, colleges, and institutions, according to him. He also praised members for their unwavering support for FIBACI's leadership in Nigeria.

Earlier, Susan Greenfield, World President of FIBACI, stated that despite global economic issues, FIBACI Nigeria has remained firm in its activities by providing advantages and values to members and focusing on the development of young professionals.

She praised the organization's leadership and asked the executives to continue the outstanding job begun by their predecessors.
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