The dream of every Nigerian is the security of owning a home, but that reality has been scuttled, following rising prices of building materials and rents in the housing market.
Statistics show that the housing sector has recorded one of its worst moments the past two years, plagued with a deficit of affordable homes supply estimated at about 22 million units.
Currently, vacancies are at the record lows, mortgage rates have skyrocketed, making mortgage repayments more expensive, while interest rates are high for people seeking banks lending to build homes or buy property.
There is also less funding for projects, difficult documentation process and structural collapses, while many projects were stalled and property developers had to review costs, as well as construction delivery time due to weakening naira/high exchange rate.
However, with political campaigns beginning this week, ahead of the 2023 Nigerian general elections, there are fresh concerns by stakeholders that the housing deficit may worsen and investments will drop due to uncertainties.
The operatives are calling on political parties to introduce housing reform and agendas that would privatise the construction industry, as well as prioritise housing development and policies that would make mortgage subsector vibrant.
The President, Real Estate Developers Association of Nigeria (REDAN), Aliyu Wamakko, said although the election has not started, housing projects in the sector are stagnant because of some social/economic factors affecting the businesses.
“No significant housing projects are ongoing; the dollar to naira rate is over N700 now, which I believe is not good for real estate business. Perhaps, when the elections start, the dollar to naira rate may come down because of possible flow of dollars into the market and that might help our businesses.
“We believe that there are some time bombs on the ground as regards insurgency and banditry happening in the North and South East and activity of certain security agency in the Southwest.
“From this perspective, we can say whether we are ready for the elections or not. They are real issues that need overhauling for us to have a smooth election in this country. We in the real estate sector with over 3,000 membership firms and offices across the states are yet to make up our minds on who to elect because none of the parties has come up with a housing agenda that tally with our vision and mission as estate developers,” he said.
Wamakko expects political leaders coming on board to privatise construction industry, especially housing.
He said: “Nigeria is not a socialist country, the government has no business in the housing industry. “When the government builds houses, the contracts are inflated to benefit those in government,” he said.
The REDAN president urged governments across all levels to provide budget for housing and engage private developers at a single interest, to build low- cost housing, while the developers pay their taxes to the government in return.
“Through that, houses will be built for the benefits of civil servants in the states and at the federal level. There is no way the government will lose in this situation,” he said.
Former chairman, Nigerian Institution of Estate Surveyors and Valuers(NIESV), Lagos branch, Mr. Kola Adefila, said uncertainty over the election is creating palpable fear, adding that if the environment is not secured, people won’t invest their money in the housing sector at this period.
“The disunity in the country is one area of concern. If the election goes on smoothly, investors will settle down and invest their money, but when there is no confidence, particularly with the way the security situation is, it will be difficult to invest because returns on property investment takes a long time.”
Adefila argued that political actors need to prioritise housing developments, as one of the critical sectors to drive growth in the economy. To him, the housing sector can create a large volume of employment because so many components are tied to housing.
“One of the issues of crisis in the country is unemployment. The young and old are out of employment and it calls for concern. If leaders can prioritise housing, it will provide jobs for these people and help to grow the nation’s Gross Domestic Product (GDP),” he said.
NIESV past president, Sir Rowland Abonta, said the impact of the electioneering period on housing sector has so far been a negative one because of the money politics, whereby politicians hold dollars that would have been used for other things for political reasons.
He said actors in the real estate sector should set up development and economic agendas for the nation and push it through to the political parties, adding that any of the parties that made commitment to it, will be seen as serious.
Abonta said agenda for housing by incoming government should be towards providing support and enabling environment for the sector and not going into contracts award, as well as direct construction of housing, which cannot solve the problem of the sector.
“Agenda of giving special rates for real estate development in view of the long-term repayment period is key. Government should also intervene in the production of local building materials and ensure accelerated construction methods for real estate sector to pick-up.
“The mortgage institution or mortgage sector of our economy should be made vibrant; government can make deliberate policies that will make the sector fulfill its purpose like in other climes. In the western world, it is the mortgage sector that prices real estate development,” he said.