Stakeholders Reject Proposed 10% Tax on Commercial Rent in Lagos

The stakeholders made the appeal at a one-day public hearing on “A Bill for a Law to Regulate the Relationship of the Parties Under Tenancy Agreements and Specify the Procedure for the Recovery of Premises in Lagos State and for connected purposes.’’

The public hearing was organised by the House Committee on Housing, chaired by Olanrewaju Layode.

The stakeholders said the 10 per cent being proposed as Deductible Tax, from the gross rent payable to the Lagos State Tax Authority will discourage investment in real estate.

Section 9 of the proposed bill says: “Where a payment for rent becomes due or payable to the landlord, a commercial tenant shall deduct 10 per cent of the gross amount of the rent as tax on the date the rent is paid and immediately pay the amount deducted to the Lagos State tax authority.

“The commercial tenant shall, in addition to the remittance to the Lagos State Tax Authority, render a written account of deducted tax.’’

The stakeholders also advocated that the Lagos State Real Estate Transaction Department (LASRETRAD)  be made a full agency of government; for effective monitoring.

On his part, immediate past president of Nigerian Institution of Estate Surveyors and Valuers, Bolarinde Patunola-Ajayi, urged lawmakers to look into the 10 per cent tax on commercial rent and avoid double taxation as landlords are already paying Withholding Tax on rent.

Patunola-Ajayi, however, noted that the bill has simplified handling of tenancy related-matters and removed a lot of complicated issues, amd called on the lawmakers to make LASRETRAD a full-fledged agency.

He also urged the lawmakers to ensure the proposed law addresses the control of service providers, which he said are estate agents.

“Estate agency is a purely professional service and should be handled by professionals.

“Let the law restrict the professionals that would handle estate agency to be registered estate surveyors and valuers and estate agents registered with LASRETRAD,’’ he added.

Also, Chairman of Ikeja branch of the Nigerian Bar Association (NBA),  Dele Oloke, described the bill as a good development but should be subjected to innovations and amendments.

Oloke said: “The issue of saying commercial rent should pay 10 per cent, I don’t think it will be allowed by the Joint Tax Board because that will become issue of double taxation.

“It will only discourage investment in real estate.

“It is the duty of government to provide shelter. Where that duty is abdicated for investors who take bank loans at commercial rates, you cannot now gag what they do with it or that they should give you part of that money.

“That will be added to their liability to the banks, when they default in paying that loan, the banks pound on their property.

“A lot of foreign funds are in real estate; we should not discourage investors. It is not the best,’’ Oloke said.

A Real Estate Consultant, Mr. Osagie Odiase, said the bill is good

“We want all agents are properly documented and registered in the state.

“We are saying upgrade LASRETRAD to an agency and enforce it (so) that all property owners engage only registered agents so that everybody can be held accountable.

In his overview of the bill, Majority Leader, Sanai Agunbiade, said the proposed law is very rich and makes provision for property recovery.

He said the new law seeks to repeal the 2015 tenancy law.

Source: Sunnews

Spain’s Richest Person Bets Billions on Prime U.S. Real Estate

Amancio Ortega is a Spaniard conquering the U.S. in the 21st century.

This month, the investment vehicle of the multi billionaire behind Zara owner Inditex SA completed a $72.5 million deal for a downtown Chicago hotel. That followed purchases within the past six months of a building in Washington’s central business district and two Seattle offices leased by Amazon.com Inc. for a combined $1.1 billion.

Ortega’s U.S. spending spree increases the value of his global property empire beyond $13 billion, according to the Bloomberg Billionaires Index, giving him the biggest real estate portfolio among Europe’s super-rich. Diversifying his fashion fortune to preserve his sizable wealth, Ortega has invested more than $3 billion in U.S. real estate over the past six years, acquiring landmark properties like Manhattan’s historic Haughwout Building and Miami’s tallest office tower.

“If I’m a billionaire investor trying to preserve my wealth for the long term, I’m looking at key buildings in major cities,” said Alex James, a London-based associate partner at real estate broker Knight Frank’s private client team. “Most billionaire clients we deal with are looking to buy in cash. They compete with major institutions — typically cash buyers, too — so it all comes down to price.”

The economic stability of the U.S. has made it a popular destination for foreign real estate investors. Cross-border acquisitions of U.S. commercial property totaled $94.9 billion last year, near a record high, led by Canadian, French and Singaporean buyers, according to Real Capital Analytics.

U.S. property makes up the largest share of the real estate owned outside Spain by Ortega’s main investment vehicle, Arteixo, La Coruna-based Pontegadea Inversiones SL, regulatory filings show. In March, the firm paid $740 million for the Amazon-leased properties, which the local county assessed at $550 million, the Seattle Times reported. The deal is among Pontegadea’s biggest and rivals what it paid last year to acquire a London office building from Blackstone Group LP.

“The Amazon deal is a statement as it’s a major infrastructure office,” James said. “The difference between Pontegadea and a Blackstone or another private equity firm is that billionaire capital can afford to hold the asset for a lot longer. They won’t have a five-year hold and then sell it off.”

A spokesman for Pontegadea and Ortega’s charitable foundation declined to comment.

Beyond the U.S., Pontegadea has invested in property around the U.K., Canada and Ortega’s native Spain, focusing on major cities including Madrid and Toronto. In a rare move away from real estate, the investment firm agreed last year to acquire a stake in Telefonica SA’s tower unit — Telxius Telecom SA — for 378.8 million euros ($423 million).

Ortega, 83, has a net worth of $63.6 billion, according to the Bloomberg index, making him the world’s sixth-richest person. Most of his fortune derives from his majority stake in Inditex, the world’s largest fast-fashion clothing chain operator. Ortega, unlike other multi billionaires, funds his investment vehicles through Inditex dividends instead of pledging shares to finance loans for other acquisitions.

SoftBank Group Corp. founder Masayoshi Son has pledged about a third of his holding in the firm, filings show, while Larry Ellison has pledged millions of Oracle Corp. shares. Since Inditex’s initial public offering in 2001, Ortega has received more than $9 billion of dividends, according to data compiled by Bloomberg.

Once the world’s second-richest person, Ortega’s wealth slumped as Inditex’s revenue growth stagnated. Its shares have dropped more than 30% since hitting a record high two years ago.

“Revenue was growing 10% a year about a decade ago, but they were less mature then in almost every market in which they now operate,” Charles Allen, a Bloomberg Intelligence retail analyst, said in an interview. “The big market where they still remain quite small is the U.S.

Ortega has spent most of his life in the garment business. The son of a railroad laborer, he started working in a clothing shop in the northwestern city of La Coruna at age 13. In 1963, he began making women’s bathrobes with his siblings and soon-to-be first wife, Rosalia Mera. He opened the first Zara store in 1975 and incorporated Inditex, a holding company, a decade later.

Ortega stepped down as Inditex chairman in 2011. He never had his own office, preferring instead to work alongside employees in the main design area, according to “Zara and Her Sisters: The Story of the World’s Largest Clothing Retailer” by Enrique Badia.

“He comes across as very authentic,” said Keith Johnston, CEO of Family Office Council, a U.K. network of about 100 family offices. “He’s a man of the people.”

Source: Bloomberg

African American CEO Aims to Revolutionize Real Estate Investing

Ryan Williams is on a mission to revolutionize the stodgy real estate industry.

Williams, the 31-year-old CEO and co-founder of fintech startup Cadre, has won the backing of high-profile investors like Mark Cuban, George Soros, Peter Thiel and Jared Kushner. He’s been on the cover of Forbes and built Cadre into a company worth nearly $1 billion.

But as an African American executive trying to disrupt real estate, Williams has also faced his fair share of skepticism.

“Real estate is a Jurassic industry. It’s antiquated,” Williams told CNN Business from the sidelines of the SALT Conference in Las Vegas earlier this month.

The Cadre CEO said he’s aware of the fact that he looks different from many of his peers, noting that both the tech and real estate industries suffer from an “out sized lack of diversity.”

Williams, who grew up in a working-class household in Baton Rouge, Louisiana, views his background as an opportunity to reset preconceived notions.

“At the end of the day, it’s about results and what you’re able to deliver,” Williams said, “not about the color of your skin, not your sexual orientation, not your socioeconomic background.”

Using tech to disrupt real estate

According to Cadre, Williams worked his way through Harvard University and launched his first real estate company during his senior year there. After stints at Goldman Sachs and Blackstone, Williams started Cadre in 2014 as a digitized real estate investment platform. Cadre’s mission is to level the playing field in an industry that is often tilted toward the biggest players.

Individuals, groups and institutions willing to invest at least $50,000 can comb through vetted real estate projects listed on Cadre’s online marketplace.

“It’s taking what’s been an offline industry and making it online and transparent,” Williams said.

Using machine learning and statistics, Cadre says it has built a technology program that provides analytics for real estate investors.

“We’re leveraging information and insight to allow people to make better investing decisions,” Williams said.

Cadre says it typically pursues deals requiring an equity investment of at least $50 million and structures the transactions as limited partnerships. The firm evaluates more than 500 real estate opportunities each year, but says it only approves about 2% of those investments.

Williams said that Cadre’s use of technology to “transform” real estate was initially met by apprehension from many in the industry.

“You’re going to get push back and people who don’t believe in this idea or concept,” Williams said. “That’s how all great innovation begins.”

He credited a network of mentors with helping to turn Cadre into a success. Among others, Williams pointed to Michael Fascitelli, the former CEO of real estate firm Vornado Realty, who now leads Cadre’s investment committee.

“I’ve bypassed a lot of mistakes I would have otherwise made because of the people around me,” Williams said. “They’re really propelled me.”

Cadre lists a number of major firms as investors, including Goldman Sachs, SL Green Realty and venture-capital leaders such as Andreessen Horowitz, Founders Fund and General Catalyst.

Kushner connections

But Cadre’s connections to Kushner, President Donald Trump’s son-in-law, have caused controversy.

Kushner was an early Cadre investorHe owns a stake in the firm worth up to $50 million, according to Kushner’s 2018 federal financial disclosure form.

Kushner’s wife, White House adviser Ivanka Trump, was involved in the creation of a new program that gives tax breaks for investors in “opportunity zones.” Cadre has launched a fund focused specifically on investing in these economically distressed communities. Those connections led a watchdog group in January to accuse Trump of a financial conflict of interest — a charge that Ivanka Trump’s attorney called “meritless.” Kushner’s financial assets are tied to Ivanka Trump’s.

“Jared was one of the key people early on. And his contributions were critical,” Williams said.

Thrive Capital, a venture firm founded by Jared’s brother Josh Kushner, was another early backer.

However, Williams stressed that Jared Kushner has “no involvement” and has sold off a “substantial portion” of his equity investment in Cadre.

And Williams insisted that the Kushner controversy “doesn’t bother us” and said his team is focused on building a great platform.

“It’s hard enough to build a business in an industry like real estate without any of the other sort of noise,” he said.

Will Cadre go public?

The Cadre platform faces intense competition from other options for investors who are looking for alternative ways to bet on real estate.

The most popular way, besides actually buying property, is real estate investment trusts, or REITs. These publicly traded companies own properties and pay out generous dividends.

There’s also Crowd Street, a rival online commercial real estate investment marketplace that was also founded in 2014. And Crowd Street’s minimum investment size of $25,000 on some funds is half Cadre’s.

So what’s next for Cadre?

It’s possible Cadre could eventually team up with a more established real estate firm or even a tech company.

Cadre could also be tempted to follow in the footsteps of Uber, Lyft and Pinterestwhich have raised billions of dollars this year by going public.

Williams didn’t want to speculate about a potential Cadre IPO, though he noted the parade of companies going that route lately.

“We think our opportunity in some ways is bigger than the vast majority of those companies,” he said.

Source: Crossroadstoday

real estate marketing

5 Fantastic Content Ideas for Real Estate Marketing on Instagram

Instagram is unique from other social media platforms because it is built for mobile-usage. Users must edit and upload content through the app on their phone, while Instagram’s website limits users to viewing, liking, and commenting.

Real estate agents regularly struggle to make content that performs well on Instagram. Those agents who are willing to learn, however, are reaping the rewards in the form of brand awareness and new business.

Instagram content is not limited to well-framed pictures of vibrant home exteriors and interiors. Eye-catching photos are great for promoting certain listings, but you will need a variety of content to engage your audience and gain more followers.

Key Takeaways

  • Promote a listing with an eye-catching photo of the home’s unique features
  • Take your followers on a virtual tour through a listing on your Instagram Story
  • Reinforce your brand with images that reflect your market’s lifestyle and trends
  • Share glimpses into your personal life to form stronger connections with followers
Source: Realvolve

Excerpt

Instagram: The Basics

Here is a quick rundown of what you need to know about Instagram:

  • Instagram is photo and video-sharing social network.
  • Everything is done through the app on your phone (although there is a “lite” desktop-friendly website for viewing posts).
  • Tons of editing options make it easy to create polished and professional-looking images and videos.
  • It’s an ideal platform for targeting a Millennial audience—60% of users are ages 18-34.

Now, if I still have your attention, let’s get to the good part—the tactics! Read on to learn 5 ways you can use Instagram to grow your real estate business and strengthen your relationships.

1) Promote listings

On Instagram, you can get really creative about how you promote your listings.

You can share an eye-catching photo of your listing—like @seatownrealestate does so well—or even a series of photos.

https://www.instagram.com/p/BgIVscOD0Zs/?utm_source=ig_embed

2) Post a virtual tour

In addition to regular posts that show up in the feed, you can also create a Story—a collection of your videos and photos that has a shelf life of just 24 hours—that will appear at the top of a user’s screen.

This is a cool way to do a virtual tour of a property—you can include a mix of short video clips, images, commentary, and captions. And because a Story doesn’t live (publicly) online for all eternity, there’s less pressure to make sure it’s perfect. Your followers will be expecting something more off-the-cuff than a typical social media post.

real estate marketing

3) Share glimpses into your personal life

Don’t just post about listings—allow your followers to learn more about you. Share photos of your life…your dog, your vacation, the sunrise at the end of your morning jog. Just remember to keep a healthy balance—even the most dashing #dogsofinstagram pics aren’t gonna sell houses.

4) Promote your brand

How have you differentiated yourself from other real estate agents in your area? However you’ve branded yourself, you can use Instagram to increase your brand awareness.

5) Provide useful [visual] information

A great way to attract followers on social media is to provide valuable information—something educational or useful.

Design inspiration is a popular topic on Instagram, and a great one for attracting potential future clients. Check out searches like #interiordesign, #homedecor, #farmhousedecor, and #dreamkitchen to see what types of photos people find most interesting. For this type of post, you could even repost other people’s compelling content.

Trust Your Guru: Three Ways To Vet Real Estate Investing Coaches

Nine years of strong economic growth has led to an explosion of real estate investing “gurus.”  They span every niche and asset type: assisted living, land, flipping, syndications of all flavors. The list is epic. When you hear the term “guru,” what emotions does it elicit for you?

When I hear it, it evokes feelings of skepticism. My guard goes up, immediately. There’s something about the phrase “real estate guru” in particular that evokes imagery of a shifty, fast-talking, high-priced “expert” — a slick operator who promises big financial outcomes if you follow their proven playbook.

In reality, there are dozens of high-caliber, successful real estate mentors with reputable coaching programs. These professionals are not so-called gurus, in my mind. They are competent professionals who operate with integrity and legitimately arm their students with the skills and knowledge to change their lives.

Full disclosure: I have personally participated in four different real estate coaching programs in recent years. As of this writing, I am actively participating in two paid coaching programs. That may or may not make me an expert on gurus, but there are some insights I can pass along from my experience of finding and vetting the coaching programs that I ultimately chose.

The Landscape Of Coaching Programs For Aspiring Real Estate Investors

Let’s get specific about the group we’re referring to. Gurus, in this context, commonly include:

• Thought leaders with paid platforms: They offer some content for free, but to access the “good stuff,” students are often prompted for a one-time payment and/or paid subscription. “Good stuff,” in this case, can include video content, white papers, calculators, guides, templates, etc.

• Private coaches: Fees range broadly, depending on the experience level of the coach, from $1,000 to $50,000 or more (prices can go much higher for elite coaches), with a possible monthly subscription free for established coaches. Mentees are offered direct access to the expert with a capped amount of time to talk on the phone or ask questions via email.

• Small group coaching: Fee ranges here are broad, typically from $500 to $5,000-plus.

• Large group coaching: These fees tend to range from $50 to $500-plus. These are typically hosted online. Popular formats are private Facebook groups and website forums.

• Meeting organizers: From meetings to masterminds, there is range of format, quality, size and substance in this bucket. Some of the old-school formats out there are still deploying the strategy of “attract attendees and give them the hard pitch by the end of the meeting.” More modern formats provide meaningful value before ever broaching the topic of asking for your money.

There are more formats not included, but this paints a clear picture: There are many options available of varying quality and costs. There are actually so many options that it can leave new investors feeling overwhelmed and frustrated. Two steps can aid you in the program selection process:

1. Set a coaching budget: Knowing your financial limit for coaching will narrow your search quickly.

2. Assess your working style: Are you disciplined? Then perhaps you will thrive in large group coaching. A benefit of private coaching is having a one-to-one accountability partner. When you jump on a call with her, she will ask you to explain why you haven’t made progress on that project you discussed last month, whereas a large group coaching program will be more self-regulated.

Three Ways To Vet A REI Coach

Once you have identified a coach you are willing to invest in, it’s time to vet them. Here are some best practices to use when vetting coaches:

1. Interview them: Approach it like a interview, where you are the interviewer making a hiring decision. They are your hire. You are the hiring manager. You have established the job description, the scope of responsibility and the results you want to see this person produce. You are going to interview them in a friendly, professional conversation that confirms your goals for the engagement are aligned. Once you establish this mindset, your selection strategy will adjust accordingly.

2. Confirm their track record: Don’t skip this step. It’s tempting to blow it off, but it’s arguably the most important. The most meaningful way to confirm the effectiveness of their coaching program is to check referrals. In this case, the referrals are former coaching students. Reach out to the students themselves. Speak with them. Ask them questions about their experience. Of course, there’s a handful of other ways to confirm someone’s track record. The simplest way is to Google them and corroborate their career moves. Claims of success on a guru’s website are just about as reliable as a pro forma financials on a property marketing brochure. Take the time to “underwrite the deal.”

3. Match for style: You will be listening to this person share their perspective on a regular basis. I think it’s important you actually enjoy their company. Reflect on a few guiding questions before making a decision: How naturally did the conversation flow between you? Was it forced and awkward? Was it natural and easy? After you finished the conversation, did you find yourself looking forward to the next chat, or does the thought trigger a fight/flight response? Each of us only has a limited amount of energy each day. If you aim to grow rapidly and achieve success through real estate investing, you need to conserve your energy wherever possible. You can’t spare extra energy emotional energy psyching yourself up to talk to a coach you don’t enjoy.

 

In the real estate business of 2019, you will encounter values-driven, excellent gurus who share their knowledge freely. They operate from an abundance mindset. They understand that when they pay it forward to up-and-coming real estate professionals, those newbie relationships will eventually reward them tenfold — whether it’s via new relationships, knowledge, deals or cash.

At their best, coaching programs matched with massive action can compress timetables, years at a time. Before taking the plunge and investing in a real estate investing coach, the first step is getting clear on your goals.

Source: Forbes

National Assembly Probes Abandoned NSITF Property in Lagos

Finally waking up to the realities that some Federal Government properties still rot away in Lagos, the National Assembly has begun investigation into the abandoned National Provident Fund building, now known as Nigeria Social Insurance Trust Fund (NSITF) along the Badagry expressway.

The culture of waste that has recently dotted the Nigeria’s landscape, continued to take its toll on properties and infrastructure. The edifice whose value experts say worth about N50 billion has been lying idle over 40 years.
Located on approximately two acres of land, on Essume Street, opposite Ade and Ola Streets, Iyana Era, the over 18-floors controversial building with other adjoining structures has become a safe den for smokers, criminals and abode for miscreants who visit the project, on a daily basis.

The Guardian investigations revealed that the project conceived in 1979, during the regime of a former president Olusegun Obasanjo was to be developed into a befitting headquarters for the NSITF. The project is proximal to National Postgraduate Medical College, Federal Government College Ijanikin, among other institutions.NSITF is one of the foremost social insurance organisations in Africa with a long history of service dating back to 1961. It started in 1961 as the National Provident Fund with the mandate to protect employees in the Nigerian private sector who were mostly in non-pensionable employment.

The General Manager, (Administration) of the Nigeria Social Insurance Trust Fund (NSITF), Mr. Segun Basorun confirmed the development.He said that the decision on what to do with the building is entirely in the hands of the National Assembly stressing that NSITF can’t on its own take a decision on it.

“The issue of that building is before the National Assembly because someone raised the issue with both committees. The National Assembly said they were going to get back to us and we are waiting for their directive on the issue.
“NSITF cannot go ahead and do anything with the building now that the National Assembly has shown interest in how the building should be handled. The NSITF cannot pre-empt the National Assembly on the matter”, he said

But the project has not been in use for any good reason regardless that the construction has reached an advanced stage for decades. Young boys in the locality now use the premises as suitable football pitch where they play games on daily basis especially in the evening.The surroundings of the building have also been turned into a dunghill and there hasn’t been any report on whether the structure has been put up for redevelopment.

The Guardian visit to the location last week further showed that many of the occupiers of the edifice are area boys who smoke and drink right in the heart of the building while some young boys were also seen playing with their lovers.
Residents of the area have also turned the premises of building now standing in the middle of a bush into other various uses like selling of motor engine oil, alcoholic drinks, food and auto-mechanic workshops where all kinds of faulty vehicles were repaired.

Despite being situated close to different churches (white garment and Pentecostal) right from the entrance of the street, the structure has become a mecca for nefarious activities as confirmed by a resident of the area, Mr. Jude Alozie. Inside the down floor are old looking arranged white plastic chairs, which he stated are used by some group of people for regular meetings.

Alozie said the police had in the past raided the building to arrest people that come to there to smoke and engage in other anti-social behaviour, but shortly afterward the usual police raids, the perpetrators would return, for their usual dealings.

“We always see young men and girls parading the location for some unknown motives. Some associations have made the building their meeting venues. It is very pathetic that the building has been there for a while and nobody has done anything significant to ensure that it is put to good use.

Source:  Guardianng

What Europe’s Low Interest Rates Mean for Luxury Real Estate

Debt servicing costs in many parts of the world are becoming more expensive, with central banks from the U.S. to Asia and the Middle East slowly beginning to raise interest rates, but there is one region where borrowing has actually become cheaper in recent years: Europe.

The European Central Bank, or ECB, has kept interest rates low to negative as others have begun to hike, most recently leaving interest rates on the main refinancing operations, marginal lending facility and deposit facility at 0%, 0.25% and -0.40%, respectively.

After its April meeting, the bank said rates will remain at those levels throughout 2019—but the market is expecting an even longer hold, possibly until 2021.

That has implications for luxury real estate in the region, though it will play out differently in each distinctive market. So what should high-end property buyers make of the ECB’s decision, and how might they act on it?

It’s Not Clear-Cut

Low interest rates mean cheap debt and typically lead to rising house prices. Generally, that indicates a good time to invest, especially if the low-rate environment is expected to continue. But the full implications vary from market to market. There are 19 European Union members who use the euro, and the relationship between central bank decisions and mortgage lending is more complex in Europe than other places.

“The transmission channel from monetary policy, markets, interest rates—the bond market essentially—to the housing market is much weaker in Europe than in the U.S.,” said Frederik Ducrozet, a global strategist at the Swiss private bank Pictet. “It is much more complicated in Europe—it’s very different from one country to the other.”

And, of course, when it comes to luxury real estate, debt is sometimes not even necessary—at least not for ultra-high net worth buyers who can afford to make cash purchases.

“Quite a lot of the luxury property sector is actually driven by equity rather than debt,” said Hugo Thistlethwayte, head of Savills international residential. “Debt is always looked at because it may be convenient [to use], but it is rarely the driving force behind it.”

Low rates affect more than just the mortgage and refinancing markets, however. They tend to boost home prices across the board and stimulate real estate as an investment class, including luxury real estate. Moreover, many buyers, including affluent but not super-rich people with earned income, and those on the market for a primary home, will still use some debt.

What to Know

If you are looking to take advantage of cheap debt, remember that long-term fixed-rate mortgages are more common in some countries than others. Every market is slightly different, but Germany and France have longer fixed-rate terms than Spain and the U.K., for example.

“If interest rates start looking like they might go up, then your ability to fix now will be a drive, because you are going to be fixing for 30 years,” Mr. Thistlethwayte said.

 

If you are a risk-taker, however, you might bet that the ECB will not raise rates any time soon and opt for a variable rate, which is lower than a fixed one.

“You run the risk of rates going higher, but if they don’t go higher then you pay less,” said Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics.

More risk-averse buyers, especially those in markets where long-term fixed rates are not an option, might find themselves worrying about an eventual rate hike. Even though the ECB is unlikely to move quickly, real estate is a long-term investment, and rates cannot stay low or negative forever.

(Negative rates mean that depositors must pay to deposit money with a bank, rather than receiving interest on it.) In that case, consider choosing a property that can be monetized if need be, whether by renting it out or increasing its value through renovations and improvements over time.

“You are going to move into a higher interest world over the next decade; it probably means that capital growth will be slower, and therefore you want to outperform the market,” said Liam Bailey, global head of research at Knight Frank. “Things like value-add opportunities are a great way to try to outperform the average—because the average might not be very exciting.”

He also pointed to a shift in demand toward urban markets such as Madrid, Barcelona, Paris and Berlin, where owners can arrange short-term or Airbnb-style lettings to mitigate future debt costs. (That is more feasible in some markets than others; the U.K., for example, has raised stamp duties for buy-to-let investors in recent years.)

Where to Buy

Experts point to Spain and Portugal as attractive markets for investment, where prices are still recovering from the 2008 property crash.

“Those markets were absolutely destroyed,” Mr. Vistesen said.

So if you are looking to buy a holiday home somewhere warm, you are likely to get more for your money there than France, for example. And though mortgages are less likely to be fixed there, growth prospects in the region will likely offset the impact of future interest rate hikes.

 

“The Spanish and Portuguese markets are set for some relatively strong growth over the next 12 to 24 months,” said Knight Frank’s Mr. Bailey.

“City authorities in European markets increasingly are really trying to attract global investors into their marketplaces,” he added. “They see it as a way of kickstarting regeneration projects and kind of helping to make city economies more dynamic, by encouraging wealthy overseas investors.”

There are, however, some things to watch out for.

“Often a long, ongoing interest rate situation can spur development activity which can bring an oversupply and falling prices toward the end of the cycle,” said Zoltan Szelyes, head of global real estate research at Credit Suisse.

And if bubbles start to form, you cannot count on the ECB to step in.

“They will never hike just to tame a bubble in some country in asset prices—they are always taking this into account but, in the past at least, it’s never been a major driver of their decision,” said Pictet’s Mr. Ducrozet. “They should have probably tightened more due to what happened in Spain and they didn’t.”

“I do think you’ve got to look out for bubbles, and those that have been rising longest are probably up there,” said Savills’ Mr. Thistlethwayte.

In Iberia, major cities like Lisbon, Madrid and Barcelona were first to recover from the crisis. Mr. Thistlethwayte said he is a “big believer” in secondary cities such as Valencia and Seville, while cautioning against other European capitals including Paris, London and Amsterdam.

The Italian market, meanwhile, has been slower to take off, but Mr. Thistlethwayte said Savills currently has two successful new-build schemes underway in Rome, while Milan is becoming “a bit hipper” with more wealth moving to the city center. Those cities, he said, are worth consideration.

He also highlighted Germany’s potential and said investors are beginning to see residential property there as an investment class, rather than just a place to live. The cost of borrowing in Germany has made many occupants who would traditionally rent consider buying instead, and Frankfurt and Berlin are experiencing both domestic and international demand.

Consider the Bigger Picture

Interest rates are not the only factors affecting housing across the continent. In southern Europe, for example, many countries have implemented tax breaks and other incentives for wealthy individuals that are likely to have an even stronger impact on the market.

A number of countries have implemented Golden Visa schemes over the past decade, which allow foreigners access to the Schengen area if they invest in property. Portugal also brought in a non-habitual resident tax to incentivize wealthy foreign nationals to immigrate there. Italy, meanwhile, is in the process of rolling out a so-called flat income tax for foreign pensioners, or retirees.

And then there is the U.K., where property investors are more concerned with Brexit and the British pound than the rate environment.

“We know in London that high-end luxury prices have fallen and that’s because of Brexit, because some of those investors aren’t coming in anymore,” said Pantheon’s Mr. Vistesen. “They’re not interest-rate sensitive, they just want to be sure they can actually sell again or even live in the city, which they are not sure about.”

In Mr. Thistlethwayte’s view, the future of London’s property market “depends on what you think is going to happen with sterling, … what is going to happen with Brexit, what ability does [London] have to continue to generate money as a financial center—and it really depends on which side of the Brexit argument you come down.”

Conditions will Remain For the Foreseeable Future

Where and how to invest in European real estate depends on a number of variables—your long-term goals for the property, which bracket of luxury you fall into, whether you need to use debt, your risk appetite, and even your take on Brexit. You will also have to consider the diverging tax and regulatory environments and mortgage-lending practices in each market before making a decision.

But one thing appears certain: Interest rates in the region will be low for the foreseeable future.

“Even if rates are likely to increase at some point, we need to realize that we live in a low growth and low inflationary environment,” said Credit Suisse’s Szelyes.

So if you have been thinking about buying property on the continent, now is likely the time to do it.

“The macroeconomic environment is supportive,” Vistesen said. “The ECB’s policies are to a large extent responsible for that, because they are saying, ‘Look, we are not doing anything for a long period of time, so you go and buy your house in Spain, if you can find a good priced little house—we are not going to jump the gun in the next six months with a sharp increase in interest rates.’ That is an important part of it.”

BY PORTIA CROWE

Hope dims on housing roadmap as Buhari’s 1st tenure nears end

A very robust roadmap on housing was one of the early policies and programmes of the Muhammadu Buhari administration that Nigerians, especially those in the low-income class and still in the housing market, welcomed with high expectations. But as the clock ticks for the end of Buhari’s first tenure, these expectations are waning.

The roadmap, which focuses on home seekers who are in the majority and those who are most vulnerable, places much premium on planning which, the government reasoned, was key to successful execution, requiring a clear understanding of those for whom houses are to be provided.

Nigeria’s housing market is populated by an army of low-income earners which explains the wide housing demand-supply gap estimated at 20 million units. Again, the clan of people considered to be vulnerable – people that are generally incapacitated one way or another – is large in the country.

This was why the roadmap raised much hope, but with a few weeks to the end of Buhari’s first term in office and little or nothing done to cater to this class of people, hope on the roadmap is dimming with each passing day.

“The roadmap was well conceived and conveyed by the minister of power, works and housing, Babatunde Fashola, but like anything in Nigeria, it is always easier said than done,” said Yemi Madamidola, a real estate manager. “Here, government finds it hard to walk its talk and this is why we don’t get anything done.”

Madamidola noted, however, that since Buhari was coming back for a second term in office, there was need to follow through the roadmap in order to deliver housing to those in that class who would never be able to afford what was on offer in the open market.

Though Johnson Chukwuma, a structural engineer, applauded the roadmap, saying government’s intervention in the housing sector was long overdue, Adetokunbo Ajayi, MD/CEO, Propertygate Development & Investment Company plc, warned that government should trade cautiously with the roadmap.

“Government should avoid the temptation of getting into housing construction in its zeal to accelerate housing delivery. That will lead to regression and breed corruption,” Ajayi advised. “Government should rather focus on helping to build strong housing and mortgage systems with the private sector serving as the engine of execution.”

But Fashola insisted that government must lead the change that was needed in the housing sector, recalling that over the years, Nigeria had embarked on a series of housing initiatives but not one of them had been pursued with consistency or any measurable sustainability.

“We are convinced that this change must be led by government and subsequently driven by the private sector,” Fashola said.

He cited the public housing initiative of the United Kingdom which was started by government in 1918 and, as of 2014, had recorded 64.8 percent of the people who were home-owners.

Fashola also cited Singaporean initiative in housing which, he added, was started by government in 1960 and has provided housing for 80 percent of its people.

He pointed out that what was common to both models was that there was a uniformity of design, a common target to house working class people and not the elite, standardisation of fittings like doors, windows, space, electrical and mechanical, and also a common concept of neighbourhood.

Re-emphasising the focus of the plan on the low-income earners and the most vulnerable, the minister also recognised that there were people who wanted just land to build for themselves, and also those who wanted town houses and duplexes, whether detached or semi-detached.

“But this class of people is not in the majority and so, they are not part of the target of the plan. The people who we must focus on are those in the majority and those who are most vulnerable,” he stressed.

Source: By CHUKA UROKO

The Journey Leading to Launch of Real Estate Data by REDAN

On the 7th of May 2019, the Real Estate Developers Association of Nigeria (REDAN) launched the National Real Estate Data Collation and Management Programme (NRE-DCMP), which is designed to help tackle housing problems in Nigeria, including that of deficit.

NRE-DCMP was initiated by REDAN, in collaboration with the Central Bank of Nigeria, the Federal Ministry of Power, Works and Housing, Federal Mortgage Bank of Nigeria, Nigeria Mortgage Refinance Company, The German Society for International Cooperation, National Bureau of Statistics, National Population Commission, Mortgage Banking Association of Nigeria, World Bank, Growth and Empowerment in States, Pison Housing Company, Building Materials Producers Association of Nigeria, Association of Housing Corporations of Nigeria and FESADEB Media to collate property price index nationwide to solve housing problems in the country.

According to the body’s President, Ugochukwu Chime, the data, collated from national land administrators on pre-construction, construction and post construction activities nationwide would be hoisted on the Nigeria Mortgage Refinance Company (NMRC)’s website for public usage.

According to a presentation by Dr Michael Mba, who spoke on behalf of the Technical Working Group, the journey began in October 2017 with the programme launch during a national conference to sensitize stakeholders and the public on the programme.

Regional workshops in the 6 geopolitical zones with developers and states land admin officials followed in February 2018. This led to the first data collation from developers and states land admin agencies.

Then from August to December 2018, they began a pilot off-takers and business surveys. The pilot survey was to collect information from housing off-takers in the 36 states and the FCT. The business survey was incorporated into the CBN QES.

In 2019, advanced works began with stakeholder agencies to improve the data collation effort. The also began and completed a national housing conditions survey.

Off-takers Pilot Survey Outcome

A total of 19,398 off-takers have been captured into the portal, with Enugu state having the highest numbers with 812 off-takers.

The lowest number was from ondo with 292 off-takers.

Challenges of the Pilot Survey

One of the major challenges was the non-existence of a national housing programme to align with the data collation.

Lack of awareness on the benefits of providing the information by the off-takers was also another challenge.

Other Facts

Most of the respondent of the survey were full-time government employee. There were also other respondents from the private and public-private partnerships.

Almost 70% of the off-takers captured earn less than N100, 000 monthly.

The Business Survey Outcome

A total of 191 developers responded for Q2-Q3 2018 from 29 states with a response rate of about 51.6%.

There were no responses from Anambra, Borno, Cross River, Ebonyi, Kduna, Kebbi, Kogi, and Sokoto.

Challenges of the Business Survey

First was the lack of cooperation from real estate developers in most states to provide data.

Also most developers complain of inactivity due to lack of finance to execute projects.

Other Facts

Most of the houses sold were for the middle income group.

Outstanding Issues

Having launched the data on 7th of May, a data dissemination workshop for further interaction with stakeholders will follow immediately.

From April to June 20129, the mission will be to align with relevant collaborating agencies for a full scale nation-wide off-takers survey.

Within the same period, REDAN will conduct a national housing conditions survey to establish the housing deficit figures.

Then from June to July 2019 will be the compilation of national residential property price index (RPPI) to track price movements.

By Ojonugwa Felix Ugboja

Multigenerational households are on the rise, according to new data

The real estate and construction industry will increasingly have to grapple with an older population and consumers who want homes that can house extended families

The United States is currently experiencing sustained, decades-long growth in multigenerational households, according to recent research, though nearly a century of focus on single-family housing means this transition also raises challenges.

Today, up to 41 percent of Americans who are buying a home isalso considering accommodating a family member from another generation, such as an elderly parent or adult child, according to research first reported by Fast Company from John Burns Real Estate Consulting. That figure stands in stark contrast to the middle decades of the 20th Century when only a small minority of Americans lived in multigenerational households.

Data from the Pew Research Center shows that in 1950, 21 percent of Americans lived in a multigenerational household. That number continued to fall over subsequent decades, eventually bottoming out in 1980 when it hit 12 percent.

Since then, however, the number of Americans living in multigenerational households has been rising, eventually hitting 20 percent in 2016. And, as the research from John Burns Real Estate Consulting suggests, even more, people are apparently considering a multigenerational living arrangement.

Though multigenerational households are still in the minority, Fast Company argues that there are some significant drawbacks to the single family households that dominate the U.S. Those issues include social isolation, a lack of community and cities that are forced to allocate vast resources for moving around people “who want to live conspicuously apart.”

“There’s been so much emphasis on independence and on privacy that we really designed community right out of our lives without knowing it,” architect and housing consultant Katie McCamant told Fast Company.

There are significant challenges when it comes to accommodating the growth in multifamily households, the largest of which is perhaps — as Fast Companypoints out — that much of the housing in the U.S. is comprised of single family homes. This type of housing tends to require a car to get around and can be especially challenging for seniors who eventually lose the ability to drive.

A Lennar Next Gen floorplan. Credit: Lennar

However, the market is beginning to adapt to an older population that wants to age in place — and potentially live with family. Homebuilder Lennar, for example, currently constructs houses that are designed to accommodate multiple generations. The homes are part of Lennar’s “Next Gen” program, which the company says “opens the door to an array of financial and logistical benefits, while providing the opportunity to share the comfort of your home with loved ones.”

The program is currently active in 14 states.

Families that can’t or don’t want to build a multigenerational house from scratch are turning to other strategies, such as adding onto existing homes or building an apartment in the backyard. Fast Company describes this as a more common option. And indeed such add-on spaces are often referred to as “mother-in-law” apartments, a moniker that speaks directly to their role in housing extended family.

Other options exist as well. McCamant, the architect who spoke to Fast Company, works with communities to build co-living housing geared specifically toward seniors. There are also various home-sharing options, such as seniors renting out rooms to younger people and college students.

All of these options, however, point to a clear trend: both attitudes about housing and the type of housing that is available is shifting. As a growing number of baby boomers reach old age, then, the question is what exactly the future of real estate will look like.

“It’s really about a proactive approach to: What do I want to do with this last third of my life and how do I set myself up for that?” McCamant told Fast Company.

Source: By JIM DALRYMPLE II

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