3INVESTONLINE – In less than 60 days, the largest convening on African real estate will hold at the illustrious Intercontinental hotel in Lagos; as various stakeholders and sector influences explore the theme of this year’s REAL ESTATE UNITE conference, “Igniting the F.I.R.E: Where Lies The Key?” F.I.R.E is an acronym for the four factors identified as major contributors to the current and future state of African real estate: Financing, Infrastructure, Red-Tapism and Education. The question is which of these four should be the focus of any initiatives to catalyse the industry or should efforts be a combination of strategic moves on all?

The average man or woman on the street will tell you that their first barrier to owning or developing property is funds. Those of us who are stakeholders in the industry can name a few other issues but the general consensus across the board would be that, financing is the first hurdle to be crossed if one is to own, lease, manage and/or develop property.

In other parts of the world, access to financing for property development comes in the traditional form of low interest loans paid off over a long period of time. The mortgage system was designed to empower the common man—and even the more experienced developer—with access to patient capital that would make property ownership a reality; especially with personal homes. As the world becomes increasingly urbanised and the demand for living and working spaces in urban areas continue to explode; so also are the prices attached to the properties to be purchased or built. In Africa, where very few financial institutions exist to provide either the patient capital or the favourable repayment interest rates, what alternative types of financing models can be employed across the continent to meet the huge gap between demand and access to affordable housing?

Does the answer lie with policies enacted at the government level? In January this year, President Goodluck Jonathan inaugurated the Nigeria Mortgage Refinance Company (NRMC) to boost mortgage financing in Africa’s largest economy for housing delivery and home ownership schemes; as part of his nation’s transformation agenda. In its financial capital, Lagos, the state government has its Lagos Home Ownership Mortgage Scheme (Lagos HOMS)—a government initiative to encourage and support home ownership of First-Time Buyer (FTB) residents of Lagos State to purchase decent and affordable homes through the provision of accessible mortgage finance. So at the top and bottom of government tiers, strides are being taken to provide flexible and more palatable financing options to those who wish to carve out their own little bit of their fatherland.

However these are still not enough. In a country of 170 million—with Lagos being home to at least 10% of that—it is going to take private sector interventions to successful bridge the gap of access to financing. Or is it? This is what REAL ESTATE UNITE 2014 will try to answer.

Will it be through the private sector financial institutions? Will it be the increased and effective inclusion of women? Or will it be the revision of customary laws with regard to land ownership? Should the answer lie in the enforcement of construction and building best practices? Or in aggressively courting foreign investments to provide access to global funds that will serve as patient seed capital? What about the global shift on eco-friendly, green and sustainable building materials? Will the use of indigenous building materials lower construction costs, which would then reduce the amount of financing that a developer needs to secure; and inadvertently lessen the financial burden on the institutions who provide the funding?

We at 3Invest do not know the answers but what we have done is provide the platform to find them. Join us in October at the conference to ignite the much needed F.I.R.E in the sector to play a much more significant role in building national GDPs across the continent. Registration is open for the limited spaces and we welcome suggestions and contributions on how we can address the issue of financing for real estate.

Africa is rising. If we indeed want to ensure that the continent makes a continued and sustained growth for generations to come, then we have to look at how we provide the most basic of human needs which is shelter. This is the primary role of the real estate sector and why we are excited to meet on this topic.

Click Here to Register for Real Estate Unite 2014

 

2014-08-04