AN ASSESSMENT OF THE CHALLENGES FACING REAL ESTATE FINANCING IN NIGERIA

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AN ASSESSMENT OF THE CHALLENGES FACING REAL ESTATE FINANCING IN NIGERIA

ABSTRACT

Financing real estate development is fraught with many problems, thus the research assessed the problems and prospects of contemporary sources of real estate finance faced in Nigeria. The researcher identified the traditional methods of real estate finance, and the problems associated with the identified method. More so, the research work examined the problems militating against the effective use of contemporary sources of finance and the type and sources of the modern methods of financing real estate development. The researcher proffered necessary solutions to curb the menace. The researcher made reasonable suggestions which are contained in the recommendation which is the government should encourage individuals to save at high interest rates and borrow at low interest rate. This will encourage them to building their own house with less or minimum financial stress. Create enabling environments for mutual funds and other sources of long-term funds to come into estate delivery system.

CHAPTER ONE

BACKGROUND AND OBJECTIVES OF THE STUDY

1. 1  BACKGROUND

There is no doubt that finance is the most important factor and the very crucial ingredient necessary to own a decent accommodation. It constitutes the single dominant production catalyst in all spheres of human endeavors.

Therefore real estate development depends, to a large extent, on the availability of finance whether owned by the developer or secured as loan from external sources. Research has shown that most property developers do not have sufficient funds to execute their project, because of the large capital required for real estate development (Mc Mahan, 1989), and where they have; they do not always want to commit all to property development because of the troubles and risks involved in such venture. Besides, most developers seek to finance their project from internal and external sources in the form of equity and debt finance.

There are several ways and sources of real estate finance, some traditional and some contemporary. The contemporary method of financing real estate development is still new, and has not been fully appreciated by property developers. This resource therefore seeks to explore both the traditional and contemporary methods of financing real estate development and the problems affecting them. This project will therefore, assess the problems and prospect of financing real estate development in Nigeria.

1.2   STATEMENT OF PROBLEM

This study tries to find out the various challenges faced with real estate financing in Nigeria. The challenges facing real estate financing is an issue that affects real estate companies and real estate developers. These challenges facing the sector have hampered it from realizing its true potentials.

The limited source of funding for developers in Nigeria since real estate development is capital intensive, it is inevitable that developers would need external support to finance their project. But the huge interest rate of commercial banks is a turn-off to most developers in Nigeria.

There is little awareness on alternative source of funding and procedures for obtain loan for real estate development. Though the recent Nigeria mortgage in finance companies established to ensure the funding of real estate was a glimmer of hope, its effect is yet to be felt.

The process of allocation and registration of changes on land is an impediment to real estate development. Often times, a developer’s application will pass from office to office over several weeks and by the time the necessary approval is obtained, he or she would have lost his source of funding.

1.3   AIM AND OBJECTIVES

The research is aimed at assessing contemporary sources of real estate finance and its associated problems with a view to suggesting policy recommendation.

        To achieve this, the following objectives shall be pursued.

• To identify the traditional methods of sourcing real estate finance.
•  To assess the problems associated with the traditional method of real estate finance.
• To identify the contemporary sources of finance.
• To identify the problems militating against effective use of contemporary sources of finance.
• To identify the type and the sources of the modern method of financing real estate development.

1.4   SCOPE AND LIMITATION OF STUDY

The research work assesses the clogs to effective and efficient real estate development financing within the country.

Furthermore, it was an onerous exercise to gather the required data owing to administrative bottle-neck, corruption, distance, and time factors.

1.5   SIGNIFICANCE OF THE STUDY

Finance is essential in the property market as shelter is one of the three basic necessities of life. As a result of its important, it has been observed by all as an indispensable tool to our daily activities. To realize this essential need, without finance, large scale estate development will be a pipe dream. Therefore, this project is designed to acquit private developers of what they should know before embarking on any building project. Barlow, (1986) described real estate finance as the “lifeblood” of real estate transactions. The availability of real estate finance has provided a short cut to real property ownership to millions of home owners all over the world.

This project will serve as a guide to encouraging them by pointing out the various means of accessing funds, necessary for housing delivery in Nigeria. Finally this project is obliged to suggest solution to the multi-faceted housing finance problems and encourage public sectors developers to implement policies and programmer necessary to enhance and complement the efforts of the private sectors housing development. It will also contribute to the body of knowledge by serving as a reference material to subsequent research.

1.6   METHODOLOGY

Research methodology is a systematic way of finding new knowledge of subject or been brought to a logical conclusion.

The methodology used in carrying out this project is through personal observation and research regarding issues on the challenges facing real estate financing in Nigeria.

 SOLD BY: Excellent Project| ATTRIBUTES: Title, Abstract, Chapter 1-5 and Appendices|FORMAT: Microsoft Word| PRICE: N3000| BUY NOW |DELIVERY TIME: Within 24hrs. For more details Chatt with us on WHATSAPP @ https://wa.me/2348055730284