The Sun News

Govt’s policy inconsistency, bane of real property development

Maduka Nweke; [email protected] 08034207864, 08118879331

Inconsistency of governments’ policy stance on protracted court cases on land disputes have been listed among factors responsible for the slow pace of development in the built environment. This is because oftentimes such actions could stop real estate activities that could help in reducing housing deficits. Government policies on a surveyed land by private individuals could as well stop work on an estate that is close to delivery. If being in the real estate industry was easy, well, then everyone would be doing it. However, the truth is that no matter how personable you are, and regardless of your many connections, there are certain factors you simply cannot control when it comes to the productivity of the real estate market. There are certain things to consider when evaluating your potential success in the field.

Downturn on economy of individuals, organisation or corporate citizens could stop work on a project billed for a delivery date. Usually, it seems like every real estate downturn gets blamed on the economy and there are reasons for this. The state of the economy plays a huge part in the amount of money that is available for people to buy homes. Factors such as politics and natural gas and oil production contribute to the state of the economy and, in turn, the real estate market. For example, if politicians are feuding over financial conditions, the real estate market could be affected as result of the dispute. Again, if government uses unsubstantiated allegations to chase around those who invest in property tagging them fraudsters, it could be a clog in the wheel of property development because those who intend to develop estates may have fears that they may be the next target.

Change of government has been the most source of policy summersault otherwise known as policy inconsistencies. This is most pronounced when the party in power is defeated thereby giving rise to opposition taking over the mantle of government. If it happens within the same party, the new person still makes slight changes that will bring some cash into his pockets. At least with the changes, there will be royalties paid to his administration that will help him to consolidate his followership. Once this job or project is stalled or stunted because the authority has changed hands, then there is tendency that a twist in the policy thrust will be effected. Perhaps, if the sector is real estate, the project will have to wait for years because all the factors that will help to complete it that have relation to building materials will have changed in prices. This is why, continuity is the answer when it comes to policies because most of the policies are for long term that will have to affect the citizens in a wide range.

In some climes where exchange rates determine how businesses are done, when the exchange rate is high, the people will change their strategy. Politics, banks and the global economy can all influence the real estate market when it comes to interest rates. The real estate crash of 2007 proved the global impact of the real estate market and increased awareness of how interest rates and loans are used in home buying. If things are not looking good abroad, it might affect your ability to sell homes domestically. Keep an eye on what is happening in the global market and with foreign investment as these play large roles into the expectations of the local market as well.

One can also change his decision when the economy dips for him. In this way, one who is building an estate may suspend action on the project pending when conditions improves. One whose children are many in schools can also stop whatever projects and mop some money to pay the school runs for the children. This is capable of holding the project until further notice. Knowledge of demographic factors such as age, race, gender and median income of a particular area will help you anticipate market trends and bet- ter position your homes for sale. Knowing whether an area is home to an aging population or is attractive to young families better equips you to show the neighbourhood to the appropriate buyer. And though you would think an area with a bunch of young school leavers would be a prime market in which to sell homes, recent graduates are often too tied up in student loans to be serious candidates for a new house. Working in real estate can be difficult but knowing how to anticipate its ups and downs can protect you when things turn awry. Keep these factors in mind the next time you start prospecting for new buyers and you will have an advantage over other agents who simply don’t plan ahead.

Every real estate agent knows that the factors that affect the housing market are many and complex. However, the one factor that is influential beyond all others is interest rates. That is so because interest rates determine how much it costs borrowers to borrow and lenders to lend. Not surprisingly, the higher interest rates are, the fewer people are going to be able to afford to borrow the money to buy real estate. When rates fall, that tends to draw into the market clients otherwise not interested. So when trying to determine the broad trends determining the direction of the real estate market, no single factor is likely to be more influential than interest rates. But what determines what interest rates will be? In a totally unregulated free market, interest rates would rise or fall strictly based upon market conditions, rising when demand went up and falling when demand dropped. However, the housing market in the United States is anything but unregu- lated, as interest rates are set by a government agency known as the Federal Reserve, or “The Fed.”

Aside this, attraction of foreign investments could be stalled as a result of change in government especially in Nigeria due to the peculiar nature of our politics. A situation where it is the winner that takes all does not support consistency. Many of Nigerians living abroad who have been angling to attract one investment or the other into the country have at one time or the other been discouraged

and disappointed by government’s penchant for petty politics. Members of the Nigerians in the Square Mile’ (NISM), a London based initiative, recently while reviewing the ease of doing business in the country blamed policy inconsistencies as a hindrance to attraction of foreign direct investments (FDI) into the country. The group said that despite some noticeable achievements recorded in the country over the years from the various reforms, the nation is characterised by myriads of policies inconsistencies and reversals that tend to blur the confidence of both foreign and local investors.

They said, a recent survey carried out by Nigeria professionals in London, showed that the major fears of foreign investors for Nigeria are policy inconsistencies, parlous infrastructure, insecurity among others. Chairman, NISM, Paul Onifade, maintained that the Federal Government and relevant stakeholders needed to implement policies that could attract investors to the country.

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