In terms of restructuring, we are looking at expanding our branches to promote greater participation of our members in branch activities because of the large geographical delineation of our branches. For instance, the whole of Lagos, Oyo and Kaduna States have only one branch each. You can imagine in Oyo State, for instance, somebody in Shaki or Ogbomosho travelling to Ibadan for a two-hour meeting. Even in Lagos, people in Lekki, Ikoyi, Badagry, and Ikorodu travel to Ikeja to attend a brief meeting. This situation has constrained a lot of our members from participating in branch activities, even when they desire to. The problem is that we have held on to the same structure we started with even when there’s a need for a change. When we were established in 1969, our membership strength was about 70, but now, we have about 20,000 members, both professionals, probationers and students. It is a major thing we are working on, and in the next couple of months, that should be addressed.
We are doing a lot in restructuring internally, including the way we run our finances. Last December, for the first time in the history of our institution, we had finance and budget training for our members and secretarial staff, just to ensure that we know what we’re doing. Also, membership is now affordable to those qualified. We have also eased the process of transferring from associate to fellows as long as you qualify. We have achieved a lot. We have gained internal cohesion and have successfully resolved all court cases amicably because we are a family working towards the same goals of primarily advancing, not just the image of the institution, but our own profession and welfare. We have done so much externally, in terms of positioning and relevance. For the first time in the history of our institution, the High Court appointed us as the administrators of the estate of one of Nigeria’s rulers that died. It’s a mark of recognition and relevance. In advancing the relevance of our institution, my own ceremonial investiture was actually done at the presidential villa. That was the first time a professional body was doing that. That ceremony was graced by a lot of dignitaries, including ministers, on a Monday. The Senate president was the chairman of the occasion, and they stayed all through. That alone showed how much they appreciate our profession.
Recently, we inducted the Senate president as an honorary fellow. The profile of our profession has actually been raised beyond what we met, and rightly so, because this is a profession that cuts across all sectors, even individually. Every human being needs this profession. Housing is one of the three basic necessities of life. In the civilised world, real estate professionals are distinguished, respected and recognised. We are repositioning our institution, our profession, to be able to play a more active role in the development of the country. We’ve repositioned ourselves, and that is why, for instance, the ICORP recognises us – that’s the first time. We have done quite a lot – to understand, restructure and put things in place for what we are set to do. We have majorly concretised our structure; now we’ll be looking at the laws. We hope to be sponsoring bills in the National Assembly and working with our regulatory body to look at our curriculum to ensure they are relevant to present-day needs.
What’s the membership criteria of your institution, and what incentives are available to members?
Like medical doctors and other fields, you can’t just wake up and join the Nigeria Medical Association. You have to be trained as a medical doctor. The same thing applies to our body; you need to have attended tertiary institutions and studied estate management-related courses before you can be admitted. Even at that, there are professional exams that you have to take and pass to come in as an associate. It’s only then that you start your practice. If you really want to be a professional estate surveyor and valuer, you must be a member of the institution. This is because it is only estate surveyors and valuers that are registered by the Estate Surveyors and Valuers Board of Nigeria that can practise in Nigeria. Before you are registered by the board, it will require your membership of the institution, you would have passed the examinations of the institution, and you would have been elected an associate. That is a major prerequisite.
What partnerships or engagements have you initiated to enhance the sector?
The institution has always been in partnership with state governments and corporate bodies. Every state has a Ministry of Lands and Housing. Every state has chief land officers and directors of lands. And in any case, all the state governors are patrons of our constitution. We decorate them. And then the president of Nigeria is our grand patron. By God’s grace, we will be decorating the president during our upcoming conference. In promoting our services in the states, our members are available to help in the development of the states. There’s a saying that land is the oil of Lagos. And it’s our members that are helping Lagos to realise that benefit.
If you go to the Lands Bureau or various ministries, you will see our members there. It’s also the same for corporate organisations. Those partnerships help to promote the relevance of our profession in those organisations and state governments.
How is the real estate sector adapting to the current economic headwinds like inflation and currency fluctuations?
The impact of inflation and currency fluctuation on our economy is not peculiar to real estate. But in real estate, it’s even much more pronounced now. It has impacted our industry and also our practice. But you must understand our role. We are service providers. Effectively, what we do is to interpret information. Many people accuse estate surveyors of actually inflating the value of properties and, by extension, house rent. That’s not true. It’s not possible. By virtue of our practice, we operate within the dynamics of demand and supply, which leads to price formation, whether in sale or rent. If you have so many properties in a particular market for rent, it is natural that rent will come down and vice versa. People complain that there are so many empty properties, but the question is, where are the empty properties located? Yes, people are in need of houses, but how many of those people can afford a house in Maitama or Banana Island or any of the highbrow areas? Society blames us because they don’t understand how it works.
We are interpreters of information and the market. If the market says this space is $80,000 per square metre, that is what we will say. We don’t determine it; we interpret it in an objective way. In terms of valuation, again, we report; we interpret. When we collect data through inspection, we analyse the market and then come up with the value of a property. Of course, if inflation was at 5 percent last October and now it is 10 percent, the value of property cannot be the same. So, inflation is an input-output thing. The cost of building materials is not the same as maybe last year, January. That affects the price of houses, and not us making things up. Inflation, currency, or whatever affects us affects our services, but we will still provide those services. Our job is based on data. We don’t predict. We don’t gamble. We look backwards at what has been sold, interpret and analyse it, and then apply it to the subject property and then arrive at a value and report it. Based on experience, knowledge and training, valuers could forecast what the economy would look like in the next six months and base their valuation on that, which is absolutely fine. However, the point actually is that valuation will have to be at that date when projections are made. There could be a difference in figures of probably 5% more or 10% more, but professionally, valuers are supposed to look back, analyse, and give an appropriate valuation report in case there’s a need to go to court; your projections would be seen as objective.
Why is the sector booming despite the prevailing economic downturn in the country?
Real estate investment is the best medium of storing value, the best hedge against inflation. There are two components to return on real estate investment – the income return and capital gains, or capital appreciation. If you keep your money in the bank, you can get a 15 percent or 20 percent interest rate. Your principal is actually losing value every day. But that is not the case for real estate. That is why when the economy is down, inflation is very high, and people are worried about securing what they have, their best option is to come to the property market. So while you secure your money, you’ll be having your income return. It may not be as high as the deposit rate, but the capital gain is massive. People keep lamenting rising prices of properties, but they need to put things into perspective. The huge prices that we are seeing today, in real value, were still cheaper than in past years, but because of the general price level, which has to be sustained. But real estate will continue to be the number one choice for a store of value.
Recently, the Federal Mortgage Bank of Nigeria raised its mortgage threshold to N50 million in a bid to increase mortgages and help close the housing gap. How do you react to this move?
We don’t have a functional mortgage system in Nigeria. Don’t let us deceive ourselves. The Federal Mortgage Bank is not a primary mortgage institution; it can’t even lend to individuals. They are a secondary mortgage institution. The N50 million threshold is definitely not targeted at civil servants; how many of them can afford it? We have Renewed Hope Housing going on, which is a fantastic concept. And I want to credit the minister for championing it and for this administration for coming up with it. But for it to succeed, we need to first fix our mortgage system. How much do they sell most of those houses for? They are out of reach. We need to look at governance and policy development and implementation. One important thing in governance that actually impacts people is continuity of policies. Every government comes in and wants to achieve everything within a four-year cycle. It is not going to work. Our mortgage system needs to be fixed. Everybody is running away from it because fixing our mortgage system requires time and putting structures in place. That structure also requires that we look at the employment situation and remuneration system and link them because if we put N30m as a cost for affordable mortgages for low-income earners, how many people can afford it? What is the salary of a graduate civil servant? Don’t forget, he’s not going to spend the whole salary paying for a house. That means we will need to look at his disposable income. So how will he qualify for such? The mortgage system is based on multiples of your annual income. They will have to factor into account your spending and so on. But we haven’t really done that in Nigeria.
Apart from the NHF contributors that the Federal Mortgage Bank has supported through private mortgage institutions, there has not been a real mortgage transaction in this country. It’s usually cash and carry. Unfortunately, even those who are running our government, policy makers, don’t understand the difference between social housing and affordable housing. They are two different things, and they appeal to two different groups. They muddle it up, but there’s a marked difference. That said, I think we have a president who really desires to drive real change, but the point is that he also needs help, especially in terms of a global view. Those that he has put in charge need to help him to break things down and work things out very properly. So my response to your question is that I don’t think we are really serious about our housing situation in this country yet. There are efforts to at least reduce it, but are those efforts really tangible? Time will tell. We need a proper mortgage system which links with the prices that we are talking about. Social housing is not about prices. It’s about the social contribution of the government.
Affordable housing should also be defined. In England, for instance, a developer that comes to the local government with a planning application will submit the designs, the number of units, the area, etc. The local government will look at it and say, Okay, you want to build 500 units of houses and apartments in Maitama? They will assess and approve under one law. They call it a Section 106 Agreement, which says that for every development – and that is for social housing – a percentage of it, which is reviewed periodically, could be 15 percent, is reserved. That does not belong to the developer. That is reserved for the government to allocate. They allocate these houses mostly to teachers, nurses, students, civil servants, and those that ordinarily can’t afford the house. They don’t give them free of charge, though, but at a discounted rate. So with that, in every community, say in England, no matter how affluent that community is, you will see teachers, nurses, and firefighters living there. But how many teachers live in Maitama, in Banana Island, Lagos? These are the sort of things we talk about when we call for clear policies.
Affordable housing in civilised countries is actually driven by subsidies, not in terms of the government giving money to developers. It is in the form of a tax rebate. As a developer, you set out your plan and report back. It is audited, and then you get your subsidy. But here, when we say affordable mass housing, even the lands, we give them to people free of charge and mostly through connection, and then they end up selling them at high prices. We have great opportunities in this country, but we need to be compassionate, especially our leaders. They need to put people in their shoes and empathise so that we can do the right thing. Our housing situation is a crisis, and we need to find a way out.
What kind of bill do you intend to sponsor to drive needed change in the sector?
Some of them are about our maintenance culture. We don’t have a national law on maintenance, and that is not good enough. We have a federal government policy on maintenance. What we don’t have is a law that actually makes sure that the private sector has a sense of maintenance and then how to implement it. What law guides various estates and facility managers? None! You see developers taking advantage of residents, not knowing that when you develop an estate and sell those to individuals, you are no longer the owner. But you still see them dictating and arbitrarily forcing policies on them, which is wrong. These are the sorts of things that we want to be addressed. There are also some laws about land administration as well that are being developed. We want to also work with lawyers and bank associations to see how we can actually develop laws that will be beneficial and sustainable. The next year will be very busy for us as an institution.
What’s your institution doing about quacks/non-professionals doing the jobs of estate management and surveyors?
Our profession is regulated, but there are unqualified professionals who operate in the sector. That said, quackery is not restricted to our profession; even in medical practice, you have quacks. That’s not to legitimise it, though. I think it’s more pronounced in our industry because the impact is immediately felt if something goes wrong. Yes, we have professional estate surveyors and valuers; however, the client has the discretion. When people want to rent out a house, they might call us, but sometimes we realise the landlord himself wants to be the one to rent it out. We cannot legislate against that; we can only encourage. And that encouragement will come from the point of strength of making use of a professional so that you are not penny wise and foolish. That is just what we can do.
In England, for instance, you don’t have to be an estate surveyor before becoming an estate agent, but the difference there is that, before you can practise as an estate agent, the law is there which specifies what you need to do in terms of registering your company, your accounts, office, everything. If you meet all those requirements, you go, set up and practise, and then you also have to regularly file returns. So there is a system of actually regulating those who are not really professionals in those countries. We don’t have it here. That is one of the things we will also be looking at. I think before now, what we have tried to do as a profession is to help these quacks set up the Estate Agents Association of Nigeria. Encourage them to join, and then we train them, which we have been doing for the past 15 years since we registered it. But again, it’s a voluntary thing, and the membership compared to the larger population of quacks is insignificant. So I think we need a much broader national law to actually regulate it. I agree, we need to do more. Another thing we’ve been doing to combat quackery is encouraging our members to deliver quality service so that the client knows the difference of taking the risk of patronising quacks instead of coming to a professional. That’s what we can do. And we have a very strict disciplinary code in our profession. If any of our members messes up and is reported, we have sanctions. That is why we are a professional body.
How is NIESV promoting the use of technology, such as GIS and digital tools, to modernise estate surveying practices?
Technology has come to stay, and it’s not only in real estate. Every sector of the economy is affected by technology. It drives efficiency and effectiveness. As far as our profession is concerned, we have gone far in adopting some of that technology in our practice, like the GIS, in terms of location analysis, as shown in our reports. As a matter of fact, viewing properties can actually be virtual now. But one thing we need to understand, not just in our sector but generally, is that our economy is substantially labour-intensive, and we need to look at the impact of a sudden widespread adoption of technology, especially in terms of the unemployment rate. In developed countries, where technology is being speedily adopted, they have a clear social security system that takes care of unemployment and the less privileged. We don’t have it in Nigeria. You don’t want to rush into rendering people unemployed because you have no provision for them. There’s a lot of talk about adopting technology, artificial intelligence, GIS and all that, but when it comes to implementation, there is resistance which is justified because we don’t have a system to absorb the impact of adoption. The implication of that is elevated crime and insecurity. But in real estate, we are trying to deploy technology, but I don’t think it has moved the way it should, and understandably so.
What have been your challenges since assuming office as the National President of NIESV?
One thing that has lessened the burden on me is the fact that I’ve been in the system for long. I was second vice president and first vice president before becoming president. And prior to that, I had been on the regulatory board. I have been chairman of the Professional Practice Committee at the board and vice chairman of the board as well. So on both sides, whether valuation professionalism or the regulatory body, I have been involved. I know the system in and out, and I don’t think there has ever been any president of the institution that has had this privilege of serving in this manner before becoming president. That gave me that unique platform. I knew what I was coming in for. And I knew that my job was cut out for me. It wasn’t going to be business as usual, and that I have done. It’s taken a lot of my time, but it’s been satisfying as well. Seeing us reach out to people in positions to partner, patronise, or help us, and seeing how they respond positively, gives me a lot of joy. It’s been wonderful. It’s a lot of work, but I will not complain because I knew before I applied and got the job. So I have to do it.
What key reforms or projects should we expect from NIESV in the coming months, and what legacy do you hope to leave behind?
We are going to reform our branch network and our internal structure for more effectiveness and relevance. These are things that we will be focusing on. Internally, we make sure that we employ technology in terms of service to our members, their continued development, and actually delivering effective service to them, encouraging them and being more transparent as well. These are the reforms we’ve started. We will complete and ensure implementation.
What would be your advice for young Nigerians who want to stay successful or even join the profession?
I always tell people that there are two global professions in the world, accounting and real estate. All global economic crises have revolved around these two professions. The last one was caused by asset mispricing and valuation. The one before that was simply subprime. So, these two professions are absolutely vital to economic development. For those who want to be in estate management, they need to understand the enormity of responsibility that this profession places on them if they want to really practice. Not all estate surveyors and valuers understand the enormity of our responsibility. Some people are in the profession just for daily bread. But you need to understand your position within the economic space and your role. Imagine that every bank facility requires collateral and that about 80 percent of collaterals are real estate. And before the bank can actually accept that collateral, there must be a valuation. You can imagine that based on your valuation report, the bank is actually advancing credits. That is major in any economy. Young persons who want to come in should be prepared and determined to be true professionals, abide by the ethics of the profession, and be ready to develop themselves so that they can reap the benefits. This, to me, is the best profession on the planet. There are opportunities everywhere, but to realise them needs necessary skills and expertise to take up the challenge and learn every day. Clients are much more sophisticated now; you can no longer bamboozle them. So you stay ahead. With the internet, the clients have the information, but we do the interpretation, application of that information, and advice. And you cannot interpret or apply if you don’t develop yourself.
