Rising cost of building materials, high interest rates, forex volatility and petrol subsidy removal have been identified as challenges confronting real estate developers in the delivery of affordable housing construction.
These challenges, the Managing Director/ Chief Executive Officer, Convvy Estates Nigeria Limited, Mr Samuel Oni, said have escalated financial projection for ongoing real estate projects in the industry.
Apart from the above listed challenges, he added that the business climate was a contributing factor.
These have affected the initial financial projection for the housing construction in Convey Estate.
Speaking with the Nigerian Tribune in Lagos, the real estate developer said the financial projection for the estate’s construction increased due to the rising costs of building materials such as cement and reinforcement bar.
Oni said “When we started the project in 2021, a bag of cement sold between N2400 and N2600; but as at this moment, a bag of cement is between N4,700 and N4,800. When you look at other building materials – nails and iron rods, prices of these materials keep on rising daily.
“Interestingly, an unplanned cost of building materials also hit us. Let’s say we used to buy 30 tonnes of sand at N100,000, the price has gone up. It’s being sold between N170,000 and N200,000. I am talking about sharp and soft sand, sawdust, granite etc. These are due to the cost of fuel and logistics.”
“The forex and high interest rate are also there because you cannot run away from these when you are running a business.
“When we started the estate’s project, dollar rate was between N340 and N360, but right now, it’s N800 plus. You don’t even know what is next,” he said.
On how he’s keeping his head above water, the CEO of Convvy Estate said he has been working around his finances and work’s ethics without compromising standards.
“Within the estate, we do some basic things by ourselves. Let me let you know that the cost of labour has also gone up. A mason or carpenter now collects N7,000 instead N3,500. We have to go back to the drawing board to look at our operation, then scale it down so that we will be picking it gradually. We are not stopping work, we are progressing but our activities are based on scale of preference,” he said.
Due to these challenges, he said that the prices of the housing units have been affected, adding that the increase in price is tied to the present economic challenges.
“Housing units’ prices ranged start from N55 million for outright purchase. The same unit can’t go for that in the next 12 months. When we started, the price was N48 million. The fuel subsidy removal is affecting our bottom line if you look at it very well,” he said.
All things being equal, he disclosed 2025 deadline for the delivery of all the housing units, pointing out that one uniqueness about the estate was that immediately you subscribe and make payment, subscribers get all their documents immediately.
Lack of transparency in the area of documentation, he said was one of the reasons Nigerians in Diaspora are wary to invest in housing back home.
But for Convvy Estates, Oni said:” When we showed interest in investing back home in Nigeria, we said we wanted all the documents to be perfected before selling any of the property. And that’s what we are doing in Convvy Estate. As you subscribe to our estate and make full payment, you get all the documents.”
Having spent two years in putting Convvy Estate in shape, Oni is of the opinion that Nigerians, wherever they are either at home or in the diaspora, should be able to buy land, subscribe or get their home conveniently without any hassel, without omo-onile’s crisis, without the issue of documentation.
“Documentation is the most common thing that is really an hindrance to people living in abroad from investing in real estate back home. For people living abroad, there is this kind of distorted information/ process that you have to get this, you have to buy this, and at the end of the day after paying for some certain documents, developers would still go back to them that they still need to pay for one kind of document that does not really exists.
“I am a Nigerian and I live in Canada, I have witnessed how things are be done over there in Canada, South Africa and other parts of the world. I am also bringing this to Nigeria and that is the basis of Convvy Estates,” the managing director said.
Sited on 14 acres of land in Alagbado/Ipaja,Lagos, Convvy Hiltop Estate, which is the first phase, comprised house types ranging between two bedroom wing duplexes and 4 bedroom standalone duplexes and 4 bedroom terrace duplexes.
Right now, construction of houses within the estate is at 75-completion stage.
Plot sizes are in 300, 450, 500, and 600 square metres. Aside-selling lands, the developer also build and sell property.
It is a fully-serviced and secured estate with fantastic and amazing features like gate house, CCTV cameras event centre, ba launch, security house, changing room, onsite facility management, shopping mall, the virtual offices, recreation area of residents, mini football field, mini basketball court, swimming pool and gym house, water supply, power supply and dedicated transformer.
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