Financing Of Real Estate In Nigeria
(A Case Study Of Chief (DR) God’swill Akpabio Housing Estate Ikot Abia Idem, Ikot Ekpene)
Chapter One
Introduction
1.1 Background Of The Study
According to Ogendebe and Adosepo (2003), proper financing is very important to successful property investment. It involves huge capital expenditure, finance is therefore an essential input of the nature which is to provide capital to enable the development of real estate by estate developers.
Real estate finance can be looked at as fund needed to carryout real estate development and other related operations. Ogandebe and Adesopo (2003) also stated that the housing finance system in Nigeria is not viable and this makes mobilization of finance and credit for housing development difficult. The ability of a developer to mobilize enough funds for the project determines largely the success of the project. Finance is an all-important factor, a very crucial ingredient to projects no matter their nature it is basically the fulcrum which sustains the lever for development projects.
The performance of any housing finance system will depend basically no the volume and nature of funds within the economy and the proportion of it that be spread, mobilized or even dedicated for housing. Real estate finance can be viewed as a fund needed to carryout real estate development and other operations.
In the hierarchy of man, housing has been ranked second and as a result of this, housing provision has become a paramount custom of the policies. Since real estate development requires huge capital, developers find it difficult to source for fund. This capitals is usually higher than the equity capital of estate developers and the only way out of this predicament is to source for funds through other means apart from personal savings.
1.2 Statement Of The Problem
In spite of the importance of development finance in real estate and estate developers are faced with the challenges of mobility to get needed finance this situation has discouraged many and consequently, obtaining houses or shelter has become difficult as a result of limited properties and the ones available are very expensive to acquire.
The consequences of the rapid rate of deterioration of urban housing has resulted in limited urban housing properties especially as there is the challenge of acquiring finance for real estate property it is view of these problems that this research is carried out to examine. The financing of real estate in Chief Dr. God’swill Akpabio Housing Estate, Ikot Abia Idem, Ikot Ekpene Local Government Area.
1.3 Aim/objectives Of The Study
The aim of the study is to examine financing of real estate in Chief Dr. God’swill Akpabio housing Estate Ikot Abia Idem, Ikot Ekpene Local Government Area. The following are the objectives of the study.
To showcase the need for effective real estate finance in Chief Dr. God’swill Akpabio Housing Estate Ikot Abia Idem.
To identify the problems encountered in securing fiancé for real estate development by estate developers in Chief Dr. God’swill Akpabio Housing Estate, Ikot Abia Idem.
To determine the possible solutions to the problems of acquiring fiancé for real estate development in Chief Dr. God’swill Akpabio Housing Estate, Ikot Abia Idem, Ikot Ekpene Local Government Area.
To showcase the possible sources of finance for real estate development in Chief Dr. God’swill Akpabio Housing Estate Ikot Abia Idem.
1.4 Scope Of The Study
The study is limited to providing fund for developing and funding real estate in Nigeria to regulate it capital intensive to a large extent, nature demand proper and adequate funding to make it realizable, the availability of the needed fund to determine the extent and the trend of real estate operative in Nigeria.
Since property development in particular involves huge capital expenditure, then financing real estate is an essential framework. Government must show commitment to meet certain criteria in order to attract domestic and international assistant through the provision of resources for the expansion of the sector. The formation of dry housing finance system will depend primarily on the volume and nature of funds within the economy and the proportion of it that can be spread, mobilized or even dedicated for housing.
1.5 Significance Of The Study
This research work will reduce to the minimum, the problem of financing real estate solution in Ikot Abia Idem since the performance of any housing finance depend primary on the volume and nature of fund within the economic and the proportion of it that can be utilize, mobilize and even dedicated for housing and also serve as a guide to the people living in Chief Dr. God’swill Akpabio Housing Estate Ikot Abia Idem.
At the successful completion of this research work, the people living there will gain, benefit through major real estate financing method such as joint venture, equity and depth financing advance payment of key money and sales of security which would enhance through equity funds. This will guarantee wholly generated and owned by one and to which there is no attachment.
The Chief source of equity fund is by savings and this saving arise out of the income of individual from employment and profit from family sources, friend, contribution and thrift system.
Public equity fund in the order hand arises from initiation extended to the public to subscribe to the equities/ownership of real estate company set up for that purposes.
1.6 Research Question
The following research questions were formulated by the researcher so as to achieve the objective of the study.
What are the possible sources of finance for real estate development in Chief Dr. God’swill Akpabio Housing Estate Ikot Abia Idem.
What are the problems encountered in securing development finance for real estate in Chief Dr. God’swill Akpabio Housing Estate Ikot Abia Idem.
What is the need for effective real estate financing in Chief Dr. God’swill Akpabio Housing Estate Ikot Abia Idem.
1.7 The Study Area
The study area is Chief Dr. God’swill Akpabio Housing Estate Ikot Abia Idem, Ikot Ekpene Local Government Area Akwa Ibom State.
The property is along Ikono Road, Ikot Ekpene Local Government Area, and the nerbourhood of the village include: Ikot Utu, Ikot Obong Ediong, Ikot Abia Idem and Ikot Idem where the property is situated the property occupy large portion of land. It was built during God’swill Akpabio Administration, in the year 2013/2013 Ikot Ekpene known throughout Nigeria as the “Raffia City” or locally simple as “IK” is a history town in the Southern Nigeria. The current Governor is Chief Dr. God’swill Akpabio it coordinates 5O11’N7O 43’E and the Total Area is 80 Sq MI (200km2), Land 48 S9 MI (125km2) population (2005), Total 230,000.
Summer (DST) not observed (UTCTI). The population is made up primarily of the Annang people with a small no, of Igbo traders and Hausa Suga vendors 75,548 males, 67,529 females, and the total of 143, 077 people. Ikot Ekpene is located between latitudes 5O10, and 5O30 North and longitude 7O30 and 7O45 east.
In Akwa Ibom state, it is the political and cultural capital of the Annang ethic group in Nigeria (Nair, 1972). The town is located on the A342 highway that parallels the coast, between Calabar to the South East and Aba to the West, with the State capital, Uyo, on this road just to the east Umuahia is the next major town to the north.
Ikot Ekpene is known as the regional centre of commerce, especially palm oil, kernels, raffia products, including raffia fiberes and its sweet wine, as well as ground crops of yams, cassava taro and corn.
Significant export also include basket weaving sculpture, and most notably, raffia cane furniture (hence the colloquial name of the town).
Though most inhabitants of the area did not have direct contact with the European traders who they called Mbakara until early in the two teeth century, it is believed that European article of trade reached the people since the 17th century sustained contact with the European began during the Aro expedition when Ukpon in Okon An Aro blood Brotherhood leader excepted to Ifuho (Ette, in press).
In November 1903, British troops arrived in the area of Calabar and the following year established a garrison there in January 1904 from Ikot Ekpene the troops marched to Uyo and from there to Abak and Opobo (now Ikot Abasi). Between 1904 and 1910, Ikot Ekpene became part of the Eyong District.
In 1914 Eyong District was broken up into two Eyong and Ikot Ekpene Districts. The new Ikot Ekpene District includes Uyo and Abak with the headquarters in Ikot Ekpene Town (Akpan, 1967).
By 1919 trade with Europeans opened up as the town became an administrative center. Ikot Ekpene became a vibrant metropolis, in 1937, the colonial administration built the main market and separated those who sold imported European goods from indigenous articles. A slaughter house was added to allow for the inspection of meat. Under the British the town became the seat of both the (Annang), Division and (Ikot Ekpene) country council. Today it is a municipal center in the state of Akwa Ibom.
Kannan nair, the noted historian described the town as a cultural and political capital of the Annang and the Ibibios. The Ibibios live to the east and most of the Annangs live to the South of the town in 1903, the British sent in troops and a garrism was stationed there at the main entrance to the town known as Control Post. The town was so important to the British that when a proposed road linking Owerri and British administrators abandoned the idea in favour of one linking Eket and Owerri in order to bring the town into the loop (Nair, 1972).
It became the site of the experiment in local self governance by the British in 1951. It was also the birth place of the famous Ibiobios welfare union when James Udo Eka teamed up with Udosen Obot at Methodist school in Ikot Obong Edong (Noah, 1988).
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