Blog, Property, Real Estate

Experts seek reforms to boost real estate

The law regulating legal estate funding needs to be reviewed to accommodate crowdfunding, according to a financial expert, Mr. Sonnie Ayere.

He said: “Crowdfunding,” an online platform for raising financing, is gaining popularity in other countries but is prohibited under Nigerian law.

He spoke in Lagos when legal and real estate experts met in Lagos at the seventh Business Series seminar organised by Detail Commercial Solicitors (DETAIL), a law firm specialising in non-court room practice.

Speaking on Alternative Funding Opportunities in a Digitally Enabled Market, Ayere, Chief Executive Officer at Dunn Loren Merrifield, said the growing trend is to look to financial technology (fintech) companies for alternative sources of funding for real estate projects, rather than the traditional banks.

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Ayere said “fintechs offer diverse financial services and solutions using modern technology, such as digital lending platforms; online real estate investment options for individuals; or investments in single-family homes for institutional investors.”

He noted that there is a possibility that in the future, Nigerian laws and regulations could change to accommodate crowdfunding.

Ayere also discussed financing options via the Nigeria Mortgage Refinance Company, which was established to further increase access to mortgages in the market. He also proposed unlocking financing capital via pension funds.

Speaking on PropTech: Developing a smarter marketplace, Dr Andrew Nevin, the Partner and Chief Economist, PwC Nigeria revealed that the real estate sector is the most important sector to the economy and the success of the economy is highly dependent on building a robust real estate sector.

However, the growth of the real estate sector is limited by gaps in the land-titling system, he said.

Nevin said: “The real estate system cannot work without a proper land registry. It is a mathematical impossibility. If you don’t know you own the land, you will not improve it. If the bank doesn’t know you own the land, they are not going to lend against it.”

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