THE PROBLEMS OF REAL ESTATE DEVELOPMENT
Problems of real estate development according to Omole (2001) are; 1. land acquisition problems ; The entire real estate development takes place on land, purchase of land from individuals involves exorbitant price due to the activities of land speculators. The land policy was promulgated in 1978 to solve this problems but it failed too. Ironically, the land use act that was enacted to enable Nigeria have access to land, hinders property developers from acquiring land for real estate development. Rigmarole processes involved in acquisition of land, cumbersome and costly procedures involved in processing certificate of occupancy and the section 34(8) of the land use act allows the maximum allocation of half an hectare of land to developers affects the real estate developers in the participation of real estate development in Nigeria. 2. Problem of finance; finance is very important in real estate development because of huge capital outlay it involves. Acquisition of land buying of building material, payment of labour and so on requires finance. In most situation finance is not adequately provided for the real estate developers. this could be due to the short- term loan that is being granted to the real estate developers. The increase in the monetary policy rate to 9.25% also result to the high interest rate on mortgage loan of the financial institution. Other stringent condition of the financial institutions scare real estate developers away from obtaining loan from them. This affect the supply of real estate in the country. 3. Inflation; The rate of inflation in the country today is quite alarming. Co-peratives which assist its members in the development of real estate through contribution is hampered by this problems. On saving their money in a bank account, they would discover that the money would not be enough for development as initially budgeted due to inflation....
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