The situation in the Nigerian housing market continues to worry observers and players as over 80 percent of the transactions in the market are on rentals. An unconfirmed report has it that home ownership level in the country is as low as 10 percent, meaning that a lot of people are renting.
The situation is such that, in the cities, one person who owns a block of 10 flats accommodates, at least, three persons in each flat, meaning that there are 30 or more people tied to only one landlord.
Johnson Chukwuma, a structural engineer and real estate consultant, blames this situation on low mortgage access in Nigeria, explaining that people don’t have capacity to buy and so have to rent.
Nigeria has a very disturbing housing situation with a little above 10 million housing stock, 10 percent homeownership level, about 5.5 percent annual urbanisation rate, and a staggering housing deficit of 17 million units.
Chukwuma laments that Nigeria is the only country where a home-seeker may have about N5 million, an equivalent of $35,000, and yet cannot present it as down payment for a decent accommodation, explaining that “this is because something that you can call middle-class property starts from N20 million”.
Timothy Nubi, a professor at the Faculty of Environment Sciences, University of Lagos, says about N12 trillion is required to finance Nigeria’s housing deficit, adding that housing in the country is estimated to be 2.3 per 1,000 inhabitants with over 70 percent of the population lacking decent quality urban life.
Nubi, whose views were contained in a paper he presented at a forum organised by the Lagos State chapter of the Nigerian Institute of Architects (NIA), also disclosed that more than seven cities in Nigeria have populations above one million, lamenting that the country has been lacking real estate-backed capital market instruments, significant social housing and new town development initiatives for several decades.
Emeka Eleh, former president, Nigerian Institution of Estate Surveyors and Valuers (NIESV), agrees, insisting that social housing is critical but has to involve government. “If government is talking about housing for all, there is no way it will not have social housing component,” Eleh said in an interview with journalists in Lagos.
The Federal Housing Authority (FHA), he noted, was established to provide social housing, pointing out that the authority should be seen to be performing that function. “You cannot achieve an equitable society without providing for those who don’t have, those who lack the basic things they should have,” he says.
According to him, even though the housing sector is better driven by the private sector, government still has to enable equitable distribution of housing to ensure that everybody is properly housed, stressing that there has to be an element of social housing that is encouraged by government because this is what is done all over the world. “In India, for instance, there is the Council Flats with all manner of social housing components,” he says.
On how government can enhance access to housing, he explains that it could do that by giving people land title without charging too much money; providing mortgages; and providing infrastructure so that developers don’t have to spend money on that.
Chuka Uroko
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