1.1 Introduction
Real estate development and investment is intrinsically connected to the economic development and well being of any nation, thereby necessitating some intervention by prudent governments. Real estate has continued to play a significant role in man's evolution. It is not a coincidence that food, shelter and clothing believed to be the three essentials that sustain mankind, also have some linkage to land. Food grows out of land while shelter is affixed to it, and man's clothing is made largely from what grows out of land. In order to understand the performance of real estate development investment, it is important to understand the nature and characteristics of real estate (goods being traded). Real estate has some peculiar characteristics that distinguish it from other forms of investment.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitation of the study and Definition of technical terms.
1.2 Background of Study
Real estate development and investment is intrinsically connected to the economic development and well being of any nation, thereby necessitating some intervention by prudent governments. Such interventions vary in degrees, depending on the nation. In Nigeria, individual could rarely lay claim to any part of it as owner and therefore could not alienate it without the consent of the head.
Proper financing is all-important to successful property/real estate investment and development. Various forms of finance on varying terms from diverse investing agencies are available to the property/real estate market. The principal field where various forms of investment finance are employed is that of development where every loan has to be specially tailored for an individual scheme and the particular stages within the scheme. Since real estate and property development in particular involves huge capital expenditure, finance is therefore an essential input, the nature of which is to provide capital to enable the enterprise operate commercially (Ratcliff, 1999). The cost and availability of finance for real estate development can influence the viability of such project. It is necessary to examine the nature of real estate investment in Nigeria with a view of finding solutions to the associated challenges.
The experience of the last 20 years suggests that the level of demand for new homes over the next decade will not be met by piecemeal incremental developments. In Nigeria today, there is a shortage of housing for low-income earners and constantly growing housing demands (due to increase in population) that are not met. Unfortunately, banks are reluctant to provide mortgage facilities to low-income earners. In order to solve the housing/mortgage challenges faced by the Nigeria populace, the Nigerian Mortgage Refinance Company (NMRC) was established to promote home ownership and increase the availability and affordability of mortgage loans to Nigerians.
In spite of the incorporation of NMRC in June 24, 2013, not much has changed. The apathy of banks towards mortgage transactions still lingers, understandably, because of the risk of default. To buttress this, 66,402 Nigerians applied for mortgages during the recent Nigerian Housing Finance Programme. Only 10,000 Nigerians were selected. However, the interest rates by primary mortgage institutions that participated in the programme were alarming (14.5% -19%).It is suggested that a cue be taken from other countries where the cost of mortgage for first time home buyers are low, with small down payments and easy terms especially, a single digit interest rate.
Therefore, in Jim-Surv Estate, Sabon Lugbe East Extension Layout Lugbe, Abuja FCT where the research was carried out, the activities that was conducted is to assess the Installmental Payments Plans in Real Estate Development and Their Effects on Housing Delivery.
1.3 Statement of Problems
In recent times, research on real estate investment has been on the front burner has it is the major source of housing for man. In the hierarchy of man's needs, housing has been ranked second and as a result of this; housing provision has become a paramount cornerstone of the policies of various governments both at federal and state levels since independence in Nigeria. The consequences of the rapid rate of urbanization are most visible in the rapid deterioration of urban housing resulting in urban housing poverty especially as there is no proportionate increase in the number of housing stocks.
The problem of housing delivery is of great concern in many countries. This problem is especially prominent in Nigeria. The challenge as been magnified as a result of a myriad of issues, not least, a high population growth rate, shortage of necessary skills and disintegrated supply chain.
There is need for Nigerian government and stakeholders in the building industry to rise up to housing needs of Nigerians in quality and quantity. Some researchers has advocated other modern methods of construction like dry construction has strategy to mass housing delivery. However, the researcher is examining how modern strategies can be used to ensure that the housing needs of Nigerians are met.
Financial houses readily obliged developers' loans, as they perceived minimum risks. Since real estate development requires huge capital outlay, there is always the need for real estate developer to source for fund. However, this study will examine the scope of real estate in Nigeria and its associated challenges with a view of making useful suggestions on the way forward for real estate in Nigeria.
1.4 Aim and Objectives of Study
The aim of the study is to scrutinize the Installmental Payments Plans in Real Estate Development and Their Effects on Housing Delivery. In achieving this aim, the following specific objectives were laid out as follows:
- To examine the modern strategies that can be used for effective housing delivery.
- To provide an overview of Installmental Payments Plans in Real Estate Development in Jim-Surv Estate,
- To examine the challenges associated with real estate development Installmental Payments Plans in Jim-Surv Estate,
- To determine the effect of Installmental Payments Plans in modern strategies on housing delivery in Jim-Surv Estate, Sabon Lugbe East Extension Layout Lugbe, Abuja FCT.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- Does the modern strategies used for effective housing delivery enhances Real Estate Development in Jim-Surv Estate?
- What is the level of real estate Installmental Payments Plans in Jim-Surv Estate?
- What are the challenges associated with real estate development Installmental Payments Plans in Jim-Surv Estate?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
- H0: Real Estate Development Installmental Payments Plans has no significant effect on housing delivery
- H1: Real Estate Development Installmental Payments Plans has a significant effect on housing delivery
1.7 Significance of Study
The following are the relevance of this study:
- The findings from this study will educate the general public on the benefit of real estate investment and its associated challenges which will form the basis for guidance in decision making.
- This research will also serve as a resource base to other scholars and researchers interested in carrying out further research in this field subsequently, if applied will go to an extent to provide new explanation to the topic.
1.8 Scope of Study
The study focuses on the Installmental Payments Plans in Real Estate Development and Their Effects on Housing Delivery using Jim-Surv Estate, Sabon Lugbe East Extension Layout Lugbe, Abuja FCT as a case study.
1.9 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Establishment Policies: Establishment policies posed a serious limitation as most staffs are not ready to release information needed for this project work. There were lots of information needed from the staffs of this establishment to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.
- Research material: availability of research material is a major setback to the scope of the study.
- Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
1.10 Definition of Terms
Investment: An investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price.
Real Estate: Property consisting of land or buildings.
…
