CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Real estate has continued to play a significant role in man’s evolution. It is not a coincidence that food, shelter and clothing believed to be the three essentials that sustain mankind, also have some linkage to land. Food grows out of land while shelter is affixed to it, and man’s clothing is made largely from what grows out of land. Indeed, whether in ancient times or today’s modern system, land constitutes a significant index for man’s wealth, and as economic activities have assumed more sophistication over time, land has continued to play a central role in their development (Lewis , 1994). There is hardly any business venture that does not require to be supported by some form of real estate: from the small business that requires real estate as offices from where its business can be organized, to the major venture that needs it for its factory.
Consequently, through some very robust and well thought out land policies comprehensively address challenges that are encounter in the real estate sector. This is not exactly the situation here in Nigeria and the result is that there is a myriad of problems in the real estate sector (Adewale, 2000). In the course of this study, the researcher will provide an overview of real estate investments in Nigeria and its associated challenges.
Real estate investment is intrinsically connected to the economic development and well being of any nation, thereby necessitating some intervention by prudent governments. Such interventions vary in degrees, depending on the nation. In Nigeria, individual could rarely lay claim to any part of it as owner and therefore could not alienate it without the consent of the head.
Proper financing is all-important to successful property/real estate investment and development. Various forms of finance on varying terms from diverse investing agencies are available to the property/real estate market. The principal field where various forms of investment finance are employed is that of development where every loan has to be specially tailored for an individual scheme and the particular stages within the scheme. Since real estate and property development in particular involves huge capital expenditure, finance is therefore an essential input, the nature of which is to provide capital to enable the enterprise operate commercially (Ratcliff, 1999). The cost and availability of finance for real estate development can influence the viability of such project. It is necessary to examine the nature of real estate investment in Nigeria with a view of finding solutions to the associated challenges.
1.2 STATEMENT OF THE PROBLEM
In recent times, research on real estate investment has been on the front burner has it is the major source of housing for man. In the hierarchy of man’s needs, housing has been ranked second and as a result of this; housing provision has become a paramount cornerstone of the policies of various governments both at federal and state levels since independence in Nigeria. The consequences of the rapid rate of urbanization are most visible in the rapid deterioration of urban housing resulting in urban housing poverty especially as there is no proportionate increase in the number of housing stocks.