With the state of affairs today in the country, it is clear to comprehend that the Nigerian economy is struggling. Exchange rates, high level of inflation and all other indicators are what makes it glaring.
With the current exchange rates, prices of commodities including building materials are on the high.
This has weakened the strength of many businesses today in almost all sectors of the economy, with the travel industry and housing sector, the mostly hit, they have really suffered significant setbacks. The current price for a bag of cement cost between #4000 to #4500 for intending home owners or those already regarded as real estate developers.
In the real estate sector, one of the disturbing factor affecting businesses is the rising costs of these building materials as compared to what they were, just over four or five years ago, giving developers more reasons to increase the prices of affording a home. This is to the detriment of who? The average or low income earners and the needy.
It is common sense to note that to meet the sustenance for the provision of affordable housing across the country, the housing construction industry should be more concerned about the economic handling of building materials costs, since it has a bearing on what the cost of the housing will be as a product.
Another factor is the sight of buildings in sorry conditions that is having a negative hold on the real estate sector in the country is the rising cost of maintaining these properties. Going by what is known of the economy presently, most incomes of some renters have either been on the decline or shaky and as such, it affects their abilities to renew these rents. This has negative effects on these buildings and the managers, as there will be little or no money for regular maintenance of these structures.
In addition, one would say that it is in the best interest of a state for a businessman with business ideas to be its head because, more business ideas or projects that can develop or improve the revenue of an entity, are created by business minded persons. However, this is the opposite of most of the states in the country. Heavy taxes are being levied on properties across the nation. State governments are now leaning on unfriendly taxation policies as a way of improving their IGR [Internal Generated Revenue]. Also, this has an adverse bearing the consumers of these properties.
In effect to this, the government has an important role to play in this. They should face the presently day reality and recreate or amend its policies that can favour the growth and development of the real estate sector.