At the recent commissioning of Kingsize Place and Larry’s Place Estates in Lagos, Deji Fasunwon, CEO of Hontar Projects, voiced significant concerns over the challenges real estate developers face in Nigeria due to the steep cost of building permits and the rising cost of construction materials. Fasunwon’s call to the government to create a more enabling environment for developers and investors highlights a critical issue within the Nigerian real estate sector.
Struggle Against Rising Costs
During the commissioning, Fasunwon pointed out the alarming rate at which the cost of obtaining building approvals has increased, forcing many to cut corners. “Doing this kind of business without an adequate enabling environment is challenging,” he explained, stressing the importance of government intervention in making funding more accessible. This would, in turn, ease the burden on developers and purchasers alike. The CEO also lamented the incessant increase in the cost of building materials, which has not only made project execution more challenging but also reduced profitability for private developers.
Impact on Housing Projects
The Kingsize Place project, which comprises 32 units of four-bedroom townhouses and a detached mansion, alongside the Larry’s Place project, which includes four units of five-bedroom duplexes and two four-bedroom penthouses, exemplifies the kind of quality housing developments at risk. These projects, designed to offer premium living spaces, face financial strain from the outset due to the fluctuating costs of construction materials and regulatory hurdles. Fasunwon’s narrative underscores the broader implications for housing availability and affordability in Nigeria.
Calling for Policy Reforms
The real estate sector’s plea for policy reforms and government intervention is not new. Similar calls have been made by industry stakeholders, emphasizing the need for the government to address the rising costs of building materials and streamline the approval process for building permits. By fostering a more conducive environment for real estate development, the government can not only support the growth of the sector but also contribute to addressing the country’s housing deficit, creating jobs, and stimulating economic growth.
As the real estate industry navigates through these challenging times, the outcomes of these appeals for government support remain to be seen. However, the continued advocacy by industry leaders like Fasunwon serves as a crucial step towards realizing the potential of real estate in Nigeria, contributing to the nation’s economic development and improving the quality of life for its citizens.