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Challenges in every sector are inevitable and unavoidable. it is almost a daily occurrence, though avoidable. In essence, just as every other business has challenges in Nigeria, so does the real estate sector. The real estate sector has a large scope of study which can be diversified into various aspect ranging from the point of view of the law, to the construction aspect amongst others. 

Indeed, the totality of the diversifications are faced with lots of challenges that affects its progress. However, housing in Nigeria have come a long way. Though we are not there yet, but there is a positive progression.

Particularly in Lagos, there has been housing units that Lagos State Government have put in place in specific locations to boost and enhance a better and affordable shelter conditions. Locations I know of are Omole,Magodo, Isheri, Igando, and Agege. Atleast, there is a relief that an average citizen can explore these opportunities, if its requirement is fair to all.

For the purpose of this article, I have come up with five challenges facing the real estate sector in Nigeria.


 Like all businesses, the real estate sector is not an exception when it comes to paying of taxes and tariffs. Nevertheless, it should be noted that the real estate sector is finding its place in Nigeria and in a growing process. It is presently playing a crucial role in the economic development of the country and of course creating employment opportunities. Imposing heavy taxes and tariff levy might hamper its growth.

Real estate investors are subjected to multiple taxations, the taxes and levies paid by them. This may include income tax, building plan approval levy, development levy, property tax, in some cases, renovation tax. There are plans by the Government to increase taxes and levy paid.

For example the new land surveyor plan fee that has been drastically sky rocketed in Lagos State. Ikorodu, Epe, Badagry Ojo and Ajeromi Ifelodun local government which before now was N120000 have been increased to N350000.

In Lagos Island, Eti- Osa, Ikeja and Apapa, which is N300, 000 has been increased to N1million. Somolu, Alimoso, Mushin, Agege, Ibeju Lekki, Lagos Mainland, Amuwo Odofin Local Government, formerly N180000 has been increased to N650000.

This price hike, no doubt has threatened the hopes of affordable construction cost and land ownership for prospective property developers, there by causing challenges to the real estate sector. That is why the government should be urged to reduce tax rates on real estate sector to pave way for its fast growth that would bring multiple benefits to the economy.


 The bureaucratic process of allocation and registration on land is one of the major weakness to real estate development. It is so bad that a registration process can take up to a year or a year and the half. As a matter of fact, i learnt that the publication for fresh applications since 2014 are not yet out.

This is because the land registration bureau has a disorganized structure and the attitude of half-hearted workers to work. This most times causes the major unwarranted delay at the land registry. This issue is one of the most frustrating aspect affecting the real estate sector, private property owners and property developers.

It is frustrating that applicants application would pass from office to office over several weeks of unnecessary delay. At the time the necessary approval is obtained, such applicant may have lost his source of funding. For this reason, the development plan may result in excessive cost of construction and high price for the developments. This may in turn relate to causes of overpriced houses that might not be affordable by common men thereby causing a challenge in the real estate sector.


Lack of basic infrastructure in many communities also adds to the challenges facing the real estate sector. Infrastructure like roads, electricity, water supply affects the prospect of the real estate development most communities. No one would want to invest in a place that is far from civilization and basic life amenities.

Places like Ajah, Epe, Eleko, Ikorodu etc where also faced with the same problem of lake of infrastructure like roads, electricity, drainage system etc. For many years, these axis were unoccupied because it lacked basic amenities necessary for living. Many thanks to Lagos State Government that brought development to these part of Lagos and has not left it in the dark.

While the Ajah Bridge is complete which of cause will promote free flow of traffic, the fourth mainland that link ikorodu to this axis is also a work in progress. All these facilities that the Lagos State Government is putting in place will help boost the Real Estate sector.


During the Easter holidays, I visited a friend along the Eti-Osa axis. He stays in very prominent estate somewhere around Eti-Osa. No doubt, the estate is unbelievably beautiful with all the amenities necessary for living in a comfortable and luxurious lifestyle. After a nice time with the family, my friend and I decided to take a walk round the estate.

While admiring the view, something else caught my attention. More than half of the estate was unoccupied. Immediately, I knew the reason why this was, but I went ahead to ask my friend. He said the same thing I earlier thought of. The estate was overpriced. He told me the amount houses in that estate cost and I couldn’t believe my ears. This situation apply to majority of houses in Nigeria most especially Lagos State.

We find that some areas in Lagos are overcrowded while a more widely geographical area are less crowded. This is so because, these less crowded areas are so expensive that even a middle class citizen cannot afford to live there. While people troop to these less expensive places, at the end making it over crowded and congested. Which in the process causing a challenge in the real estate sector.

At the end, we found out that these overpriced houses can be there for years without tenants or buyers. A decrease in the amount of overpriced houses will solve some of the challenges facing the real estate sector.


Land grabbers are popularly referred to as Omo-onile. These group of people are one of the major challenges in the real estate sector all over Nigeria. Most of these real estate operators are faced with many legal challenges either with fraudulent land owners or land grabbers. These challenges have in one way or the other made business in the real estate sector unconducive. Land grabbers appear in different forms with unpredictable degrees of disregard and disrepute to dominate another’s land and property.

The technique of land grabbers is to storm lands when construction work has just begun, demanding despicable and unlawful payments from the land owners. Any refusal attempts to pay these fees by the land owners usually leads to violence, vandalism, and other unlawful act.

Other techniques by them is to overtake lands that do not belong to them, drive away their legitimate owners. This is usually followed by a demand that a re-purchase fee of the land and other illegal payment. This payment have to be made before the legitimate owners can repossess from them.

These behaviours exhibited by these land grabbers have certain side effects. Horrible stories heard or told about their misdeeds scares potential investors away, and slows the progress in  the society. This makes a society lose opportunities and making them less developed as they would have been if potential investors were not bothered about disturbance and violence by these land grabbers.

In a normal circumstance, a mere presentation of documents of ownership is the only requirement needed to stop these violent trespassers from their illegal activities but this is not the case in Nigeria.

Though the Lagos State Government have taken steps as a pacesetter to put a law in place to outlaw the practice of land grabbing. This law is called THE PROPERTIES PROTECTION LAW 2016.

These law has helped reduced the practices of these fraudulent group of people, and reducing the challenges facing the real estate sector particularly in Lagos State. However, a uniform law of this kind should be applicable to every part of Nigeria which will be very much effective to totally eradicate this fraudulent, dubious and unlawful acts of land grabbers in Nigeria.

Conclusively, the real estate sector has great potentials that can make it stand as a substitute to oil and gas as a major source of income generation to the Nigerian economy. Nigeria has one of the fastest growing economies in the world with great prospects for investors. I would say that the real estate sector is the gold mine for everyone to explore. It is an area apart from the oil sector and the agricultural sector that can fetch a good revenue drive and sustainable income for the investors.

Nigeria is a country with vast expanse of land that hasn’t been explored yet and with a country still undergoing developmental stage. These lands will be useful for foreign investors for whatever investment or business they will be willing to take up here in Nigeria.

In spite of all these advantages on our side, if these issues mentioned above are not addressed, it would make it difficult for investors either foreign or indigenous to invest in a country facing challenges in a sector that is so fundamental to the growth of its nation.

The post 5 MAJOR CHALLENGES FACING THE REAL ESTATE SECTOR appeared first on Ibeju Lekki Lawyer.

This post first appeared on LAND ISSUES THAT CAN GET YOU INTO BIG TROUBLE PT 2, please read the originial post: here

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