The founding Managing Partner and Deputy CEO at Purple Real Estate Company, Mr Obinna Onunkwo, has said that the multifaceted challenges and opportunities within the real estate sector call for strategic policy interventions, innovative financial products, and technological adoption to harness its full potential.
He noted this during TheWitness’ recently held Real Estate Outlook event themed: “How to Succeed in Nigeria’s Real Estate in 2024 – Challenges and Opportunities in a High-Cost Environment”.
Onunkwo stressed how the significance of the real estate sector in economic dynamics and policy considerations, indicating that when combined with construction, it stands as the fourth-largest sector.
Speaking, he highlighted the importance of this sector which was evident when Dubai’s real estate market collapse necessitated a bailout from Abu Dhabi, and similarly, China’s intervention in its real estate sector to prevent economic downturns.
According to him, this underscores the global acknowledgement of real estate as a primary repository for wealth, emphasizing its long-term investment nature compared to more liquid assets like currency.
He highlighted the following points:
Onunkwo indicated that the real estate sector faces a critical challenge with the mismatch between short-term financial instruments and the long-term capital needs of substantial projects like mall construction, leading to inefficiencies.
Addressing this requires shifting towards long-term investors like pension funds and recalibrating bank policies to support extended investment commitments.
On the policy front, examples from various regions illustrate the transformative impact of effective land policy and infrastructure development. Cities like Lagos and Abuja have shown more robust real estate market growth due to more conducive policy environments, unlike others where bureaucratic hurdles persist.
Moreover, the discussion extends to the need for a comprehensive approach, recognizing real estate’s critical role in supporting sectors like agriculture, entertainment, and telecom, through tailored infrastructure and policy frameworks.
According to Onunkwo,
The narrative extends into financial innovations like the “Help to Own” program, blending funds from different sources to mitigate the high costs and accessibility barriers in real estate financing.
This initiative exemplifies the strategic use of financial products to facilitate home ownership, illustrating a proactive stance towards making real estate investment more accessible and sustainable.
Onunkwi further advised real estate developers to leverage the impact of technology for transformative prospects on real estate operations and investment models.
He noted that the shift towards digital platforms and virtual reality can redefine traditional real estate interactions, offering immersive experiences and operational efficiencies. These innovations not only cater to changing consumer preferences but also open avenues for sustainable and rapid development in the sector.
