Nigeria is grappling with a huge housing challenge of a 21 million-unit deficit, just as its population currently that stands at 220 million, is growing at an annual rate of 2.5 per cent.
Also, the country’s urbanisation rate is rapidly growing, and the United Nations has projected that unless something drastic is done urgently, about 60 per cent of the country’s population will be living in the cities by 2030.
However, with this huge gap, there are hundreds of thousands of unoccupied housing units in various residential estates across the states of the federation, particularly those built by private developers, probably due to high prices, just as there are countless abandoned housing projects by both governments and private developers across the country.
But to bridge the 21 million-unit gap, stakeholders who spoke to Vanguard on the worrisome situation, said the country needs over five trillion Naira and 2.7 million housing units annually to close the growing housing gap in 10 years.
However, real estate experts who spoke at the Africa International Housing Show in Abuja recently, said that Nigeria needs N5.5 trillion to close its housing gap, estimated at 20 million units. They added that the country also needs to build about 550,000 housing units annually for the next decade to be able to bridge the gap.
The ¦ 5.5 trillion, according to them, is the value of opportunities available to investors in the country’s real estate market.
21 million more houses needed
According to Nuel Osilama, an estate surveyor and valuer who is also Vice President, Real Estate Developers’s Association of Nigeria, REDAN, North Central, “The estimated figure, because of the data problem, based on figures available, is about 21 million to 22 million. But if you want to just oppose it with the growth rate of the Nigerian population, it should have hit like 50 million but let’s not exaggerate, let’s just put it at the figure that is defendable that is presently in the public domain which is 21 million deficit as of today.
“Based on your question, if we are looking at 20 years, we need to build one million houses every year for 20 years to be able to bridge the gap. And if we are looking at 10 years, we need to build a minimum of two million houses annually to bridge the gap, and if we are going to work with ten years, which is feasible because it is not too long, each of the state governments has to create the enabling environment and be ready to work.
“This is 2025, there should be a vision for 2035 to bridge the 21 million housing deficit in the housing sector of the country. If each state can produce a minimum of 56,000 housing units every year, in 10 years, this gap will be completely bridged.”
“For how many years? If we have 21 million, it means we need a minimum of two million houses to close this gap in 10 years. The same thing, we need a minimum of one million houses to close this gap in 20 years and we need a minimum of five million houses to close this gap in five and a half years. That’s what it is.”
Rash of abandoned housing projects
On what is responsible for abandoned housing projects across the country, Osilama who is the chief executive officer of Nuel Osilama Global, said the economy is responsible, pointing out that the value of the Naira is the major cause of abandoned projects.
He noted that with the variation in the exchange rate, most of the building materials are imported, adding that apart from cement, every other thing is imported.
“Another reason is because of the variation in the quotation. Some of these projects that are official projects, like government projects, at the time the projects were costed, the value of Naira was maybe around N400, like when this present administration in Nigeria today assumed office, the exchange rate for a Dollar was still about N400, it rose to N700, from N700 to N900, N900 to N1, 000, and today we are at N1,600.
“So you can imagine a job that was quoted for at N1 billion cannot be delivered with N2 billion now. So, that’s one of the reasons for abandoned projects. To check this, government needs to either subsidize building materials or support local manufacturing, alternative building materials, like NIBRI, and it was set up to mitigate this and they are doing very well but they are not getting the necessary support from government. The support they need is to mass-produce all the innovations that they have.
“They have alternative materials for almost every building material in the market but except they have large scale industry to mass-produce them, they cannot meet the demand of the market. The Nigerian market is very huge.”
On why we experience housing shortfalls in the country when the vacancy rate in most of the residential states across the nation is high, REDAN’s vice president said “Well, you are trying to say that there are so many vacant houses and yet so many people don’t have houses.
The difference is very clear. Most of the houses that are empty are not low-cost housing. They are high luxury accommodation. These luxury houses cost a lot of money, so they can’t give those houses to people who cannot afford the rent. That’s one reason why the houses are empty.
“Some of these houses are also used for saving their money, maybe for investment so that after a very long time, their money can appreciate instead of putting them in the banks that are no longer secure like it used to be.”
In his reaction to high vacancy rate in residential estates across the country, an advocate of affordable housing and executive director, The Housing Development Advocacy Network (HDAN), Mr Festus Adebayo,said the problem is responsible for abandoned housing projects or unoccupied housing units in Lagos, Abuja and Port Harcourt.
Houses being built for those who already have homes
According to Adebayo, abandoned housing projects are common in Abuja because developers are building houses that are not within the reach of those that really need the houses. But we keep building houses for people that already have many houses.
“Yes, when the former minister of housing was talking the other time, he said the figure they are mentioning as the housing deficit is not the same. What he was saying then is that if you go to some places in Nigeria, rural areas especially, houses are built there and the houses are vacant because the owners of the houses are in the cities.
“So, to him, since we have some houses that are not being occupied and they are only occupied from December to January, his belief is that if those houses are put into use, the situation of things will not be like this. So, it is necessary to say that the housing deficit in Nigeria is more visible in the cities than in the rural area.”
On revertilising the abandoned housing projects,.Adebayo said “Yes, we have recommended to the Honorable Minister for FCT to take the issue of property tax as a priority. If you take issue of property tax serious, you can raise enough funds that can be channeled towards revitalisation of abandoned housing projects as government officials are pursuing ground rent everywhere in the FCT now.
“Once your land is vacant, and it is found that you have not been paying ground rent, they pursue you to raise money. Property tax can be used to raise money and also to checkmate those who are building houses and at the end of the day are not willing to sell or willing to rent. By the time they have huge amounts of money to pay annually, they will be left with no option than to give the houses to people that will rent them.” .
Govt planning to deliver 50,000 houses
At the International Africa Housing Show in Abuja, Arc. Ahmed Dangiwa, Minister of Housing and Urban Development, in his keynote address emphasized the urgent need for substantial investment and strategic planning to address housing deficit in the country.
He revealed that while the government’s plan to deliver 50,000 units is ambitious, it pales into insignificance when compared to the 550,000 units required annually.
He sees this gap as both a social necessity and a business opportunity, encouraging investors and partners to participate through Public-Private Partnerships (PPPs) and collaborations with housing development finance institutions.
Disclosing that the government is making efforts to address the country’s housing challenge the minister said “The ministry has adopted a Demand Driven Approach for its Housing Delivery Strategy to avoid issues of abandoned or unsold buildings.
“Recently, an Online Housing Portal was launched to streamline the process of acquiring homes, recording over 28,000 applications since its inception.
“This initiative underscores the importance of data and a needs-based market-driven approach to housing delivery.
“In alignment with President Bola Tinubu’s Renewed Hope Agenda, the Ministry is working to establish a National Social Housing Fund (NSHF) to ensure all Nigerians, including vulnerable and under-privileged groups, have access to decent accommodation.”
