By Joe Brock
ABUJA (Reuters) - On one of the most exclusive
streets in Nigeria's capital sits a crumbling mansion
with an unwelcoming message painted at its
entrance: "BEWARE! THIS HOUSE IS NOT FOR
SALE".
The warning refers to a popular property scam. In the
most elaborate version, robbers break into your
house while you are away, change the locks, and then
produce multiple copies of fake title deeds. Posing as
estate agents, they show buyers around your house
and sell as many copies of the deeds as possible.
When you get back, your house belongs to six people.
This sort of deception epitomises the tricky nature of
Nigeria's real estate business, but despite the risks,
there are huge returns to be had in a market where
around 16 million homes are needed just to meet
current demand.
Navigating through opaque land laws, corruption, a
lack of development expertise and financing, a dearth
of mortgages and high building costs will take
courage and influential local partners.
"There are sizeable challenges to overcome but in
many ways Nigeria represents the perfect storm for
real estate investment; huge population, rapid
urbanisation and a growing middle-class," said
Michael Chu'di Ejekam, Director of Nigerian Real
Estate at Actis, a London-based private equity firm.
Actis has $5.2 billion under management, including
two sub-Saharan Africa real estate equity funds
totalling $434 million, which it says are attracting
U.S. and European investors.
Nigeria's population of nearly 170 million is bigger
than Russia's and its economy is growing at 6
percent, a combination which is producing a new
wave of property buyers from bankers and airline
staff to mobile phone and fast food shop owners.
"I see demand from the middle-class higher than ever
before," said Deolu Dara, Associate Vice President at
Nigeria-based Avante Property Asset Management,
which manages several multi-million dollar residential
projects in Lagos.
A successful real estate investment in Nigeria can
earn an returns as high as 30-35 percent, while rental
income yields in cities such as Lagos and Abuja can
easily reach 10 percent, developers and estate agents
say.
MIDDLE CLASS
Property in Lagos, a heaving metropolis of around 20
million people, can be among the most expensive in
the world with two-bedroom flats costing more than $
1 million in upmarket areas.
However, the top-end range is dominated by well
established players and developers should target
middle-income workers in major cities, such Lagos,
Abuja and the oil-hub Port Harcourt. The most
popular units fall in a price bracket of 20-35 million
naira, developers and estate agents say.
Nigeria's middle class make up around 23 percent of
the population and earn around 80,000- 100,000
naira per month, according to report by investment
bank Renaissance Capital.
In smaller cities and rural areas, a lack of information
about land and regulation is off-putting, while a
violent Islamist insurgency has made the north of
Nigeria unattractive, despite huge unmet demand in
cities such as Kano and Kaduna.
The majority of Nigerians live in poverty in shanty
towns or in basic concrete block and iron-roofed
houses they have built themselves, but building mass
housing for the poor is not a popular investment.
"If you know the market, the people, focus on middle
class and cherry pick your deals, you can clean out,"
added Dara, who said Africa's biggest oil and gas
industry is also driving demand. One foreign oil major
bought 300 flats recently.
Nigeria's construction and real estate sectors are
growing at more than 10 and 12 percent respectively,
a boon for foreign and Nigerian construction firms,
including UPDC, Cappa D'Alberto and Julius Berger.
Yet, there is still not enough quality affordable
housing because business is frustrated by
widespread corruption, poor state infrastructure and
a lack of expertise and financing.
Constructing a block of flats costs three times as
much in Nigeria than in South Africa, builders say,
and many developments are abandoned when
projects run out of money or become slums because
they are poorly built.
London-based estate agent Jones Lang LaSalle ranks
Nigeria 96th out of 97 on its transparency index, just
in front of Sudan but behind six other African
countries.
Having support from powerful politicians or business
magnates will help to avoid terminal financial pitfalls.
LOCAL PARTNERS
"It's a business that requires local partners and local
knowledge or you'll run into problems," Dara at
Avante says.
Avante's chairman is Wale Tinubu, the head of oil and
gas firm Oando and a close relative of former Lagos
state governor Bola Tinubu, who still wields influence
there.
London-based Actis has given directorships to
Nigerian energy firm Seven Energy and local
conglomerate UAC.
Once the supply challenges have been overcome,
there remains a problem with that huge latent
demand. No mortgages. Unless you are willing to pay
a 25 percent interest rate.
The mortgage debt-to-GDP ratio in Nigeria is under
0.5 percent, compared with 72 percent in the U.S.
and over 30 percent in Malaysia and South Africa,
government figures show.
"In places like America you seem to be able to buy
property without a stress but it just isn't like that
here," said Ike Ejekam, 31, who is about to buy a
newly-built two-bedroom apartment for 20 million
naira in a gated community in the popular Lekki
district on the Lagos peninsula.
Ejekam represents the new breed of buyers who
expect well-built housing with all the modern
conveniences. He works at a branch of a local bank
and is using his life savings and funds borrowed from
family members to buy his property outright.
"I don't like to think about mortgages because it
scares me when I see how difficult it is for my friends
to get a loan."
Nigerian banks don't like giving out mortgages
because reliable information about buyers and land is
scarce, while there is no secondary market to offset
the risks.
MORTGAGE DENIED
The government says it is trying to fix this by
securing a $300 million loan from the World Bank to
establish a mortgage refinancing company, which
should free up some bank lending.
A Federal Mortgage Bank was also launched this
year, which government hopes will help build
500,000 new homes. The bank plans to float a 200
billion naira mortgage bond, the proceeds from which
can be handed over to home buyers with the state
guaranteeing against default for five years.
The government is also discussing passing legislation
to create a secondary mortgage market and to
improve land laws.
"With this sense of urgency we could have a
significant improvement in the mortgage market by
2015," United Bank for Africa CEO Phillips Oduoza
told Reuters.
This optimism is also being felt by developers as
dozens of well-financed projects are underway,
including the Eko Atlantic City - a multi-billion dollar
project built from 9 square kilometres of land being
reclaimed from the sea in Lagos.
The billionaire Chagoury brothers, who are of
Lebanese descent, are leading the mega-project,
which will feature parks, swimming pools and
skyscrapers with floor-to-ceiling glass. Banks,
including France's BNP Paribas, Belgium's KBC and
several Nigerian lenders are on board.
In Abuja, UPDC has started its 228-unit 'Metro City',
which consists of well-designed blocks with balconies
built in palm-fringed private compounds. Privately
owned Churchgate Group is building its ambitious $1
billion World Trade Centre, a series of skyscrapers
housing offices, flats and upscale shops.
"Nigeria is a huge real estate opportunity," said
Ejekam at Actis. "The story is getting out, slowly."
news.yahoo.com/nigerias-property-boom-only-brave-074417318.html

All I can say is wow!Thanks for the info.

DO YOU KNOW THAT

1. Buying a Land that is deemed to be “free” but it has no Certificate of Occupancy or Governors Consent or Gazette / Excision is a gamble?

2. Buying a Land with “Gazette in Process” and “Excision in View” or “File Numbers” is an unsecured investment? This is a commonly used scam / trick by real estate development companies in Lagos, Nigeria.

3. There are cases where fraudulent Sellers present cloned Certificate of Occupancy or Registered Titles, alongside fake or forged means of identification?

4. In a situation where a Property is owned by a Corporate Body incorporated or registered under the Companies and Allied Matters Act, Search at the Companies Registry is paramount?

5. Without a grant of probate and /or letters of administration, no Vendor or Seller [whether family members or otherwise] possesses the requisite authority to sell the estate or property of a deceased person? Hence Search at the Probate Registry is vital.

6. The consent of the principal members and head of the family or community to the sales transaction needs to be obtained so as not to make the sales transaction void or voidable?

7. If the Title of a Land is defective, whoever buys a House built on such a Land is merely a tenant at the mercy of the true Owner with a valid legal Title to the Land? The Legal Maxim: “quicquid plantatur solo, solo cedit” in very instructive. It simply means that whatever is affixed or planted to a land belongs to the land.

8. It is the duty of the Lawyer of the Buyer or Purchaser to prepare the Documents which includes: Contract of Sale; and Deed of Assignment; or Deed of Sub-Lease; or Deed of Conveyance; or Deed of Transfer; or Power of Attorney; as the case may be? The rationale for which the duty of preparation of the Documents is on the Lawyer of the Buyer or Purchaser flows from the right of the Buyer or Purchase to the non - reversionary interest of the property.

9. If there is litigation on a property, the Court may order that status quo be maintained and the person in possession would remain in possession? After making payments and executing Title Documents, a Buyer can take possession by: erecting a small fence, farming on the property, putting tenants on the property, putting a security person on the property, putting construction materials on the property, etc.

10. The Land Use Act prohibits alienation of Land without the consent of the Governor?

11. Failure to pay stamp duty renders a title document unacceptable for registration and inadmissible in evidence in a court of law?

12. Registration does not cure defects neither does it confer validity on the Instrument which it would not have otherwise had but for its registration?


You need to know how to go about the process of buying and owning a Property in Nigeria. There are several Laws which govern and regulate the process. Hence, usually, it is time and capital intensive. On Property transactions, the legal maxim is apt: “Caveat Emptor” - Buyers Beware. It is not for a Seller to beware. A Buyer needs to exercise full caution and due diligence when buying a property.


READ MORE https://www.nairaland.com/4136950/guide-how-buy-property-land