It is no longer news that Nigeria has an estimated 28 million housing deficit as of 2023, indicating that the country needs at least 28 million housing units to provide adequately for the population.
Besides, an estimated sum of N21trillion is required to provide housing units to fill the deficit.
According to experts, this meant that real estate sector will need an investment of over N21 trillion to build sufficient housing for the entire population.
With the increasing Nigerian population, real estate developers and analysts are worried that this scenario may create more gaps in housing if government and concerned stakeholders refuse to step in with practical solutions.
Expressing worry that the low income earners may be pushed outside city centres, especially Lagos going by the rising housing cost, the Managing Director, Legrande Properties Development Company Limited, Mr. Babajide Durojaiye, is calling for timely intervention by the government and the private sector to solve the nation’s accommodation challenges.
According to him, government will need to intervene and collaborate with the private sector to produce mass houses to bridge the huge housing deficit.
If not, he expressed fear that houses within Lagos metropolis will be taken over by the rich and rented out to the rich at the end of the day, leaving the low income earners with no accommodation in the city centre.
With the escalating rent of N2million and above per annum for two and three bedroom flats in Lagos, he said: “There is need for the government to come into partnership with the private sector to produce mass housing.
“If we have 20 to 30 developers to do this, housing deficit will be reduced.
“If not, by year 2027, most of the people will be living in Sagamu, Badagry and Ifo in Ogun State among others.”
Durojaiye, who doubles as the developer of Alexandra Courts Coastal City, also pointed out that rising cost of building materials by 200 to 300 percent has not helped matters in the production of cheap housing units.
If the trend continues, he predicted that by 2027, prices of building materials will hit between 500 and 1000 percentage increase in the market, wondering where the masses will live.
To address the situation, he called for the intervention of government to lower the prices of building materials.
He also expressed fear about the proliferation of the property market with fake finishing materials, saying this will require the intervention of government to enforce standards and ensure that only quality products get to the market.
“There is also the need for the intervention of government in the cost of building materials. Prices of building materials are getting out of the hands of developers.
“We now have 200 to 300 percentage increase. By 2027, it will hit 500 to 1000 percentage increase. So where are the masses are going to stay? There is need to crash the price of these materials,” the managing director said.
Besides, the developer pointed out that land was critical to affordable housing production alleging that many people have been duped in regards to land’s transaction as they paid for land they never saw.
To nip the activities of fraudulent individuals and land grabbers in the bud, Durojaiye wants government to work on the Land Use Act to ensure that people have easy access to land and be able to verify its status of land before parting with money.
“There have been increased battle between developers and omo oniles. This needs to be resolved as it contributes to housing shortage in the country,” he said.
On affordable housing finance, he said this will requires the intervention of the financial sector to come up with solutions to help developers and accommodation seekers or subscribers.
According to him, short-term fund would not do it as it is not sustainable, suggesting that availability of long-term fund with single digit interest rate will go a long way.
He said: “Currently, interest rate on loan is 27 percent. If something is not done to address this and make loan on single digit available to developers of mass houses, cost of N45million housing unit may increase to N90million next year.”
The real estate developer also appealed to the media to talk to people not to see government’s intervention as a national cake, pointing out that most of the beneficiaries of FMBN’s NHF loan see it as that, hence the default in loan repayment.
In his presentation, the Company Secretary, Legrande Properties Development Company Limited, Blessing Aminolemen, said the nation’s housing deficiency grew from seven million in 1991 to 28 million in 2023, leading to overcrowded and obsolete housing infrastructure.
By the annual average rate of N7.47trillion credit to the real estate sector, he explained that it will take an estimated three years to provide 28 million housing units for the population on the premise that the latter remains unchanged over the period.
He said: “The housing deficit in the country increased from seven million in 1991 to 28 million in 2023. This signifies a 300 percent increase over the period, doubling the increase in population.
“Thus, while the population increased by 148 percent, the housing deficit increased by 300 percent.”
“The causes of this growing housing shortage also grew from a simple to a more complex problem,” he said.
In 1991, the company secretary identified mortgage inefficiency as the sole cause of the housing shortage in the country.
While this remained over the years, he said that other factors have pulled their weight to create a more complex problem.
These additional factors, he said included urban expansion, overpopulation, slum demolition, increased poverty, urban migration, cost of land, cost of registration of title documents, cost of construction, cost of materials, cost of labour, cost of fund, and land grabbing syndrome, among other factors.
He recalled that credit investment of N10.08 trillion in 2010 was the highest in the sector.
This amount, he said equalled 9.54 percent of the total credit to the private sector, the highest between 2007 and 2022.
“Overall, the credit to the sector has fluctuated over the years, going up in one year and down in the other,” he said.
He pointed out that increased investment in real estate came with more benefits, saying it would not only reduce the housing deficit in the country, but contribute significantly to the country’s GDP.
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