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FG in aggressive push to break affordability jinx in housing market


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Nigeria

IMAGE: Akon Eyakenyi, the Minister, Ministry of Lands, Housing and Urban Development »

August.26.2014

The Federal Government of Nigeria is making frantic efforts to secure support from all stakeholders in the housing delivery process with the aim of reducing cost of building and ultimately making housing affordable to medium and low income earners in the country.

The Nigerian housing market is one of the most expensive globally such that over 80 percent of the country’s 160 million people cannot afford  to build or buy their own homes, leaving  the country with a staggering housing deficit burden estimated by the United Nations  to be about  17 million units.

Critically analyzing the market, the government has realized that the affordability problem is located in the cost of construction bordering on the cost of land , building materials and housing finance, hence the present efforts by the government through the Ministry of Lands, Housing and Urban Development.

“Our government has interacted with the relevant stakeholders to reduce the cost of building. We know that what makes the cost of building high has to do with materials, cost of construction and the cost of land”, Akon Eyakenyi, the Minister, Ministry of Lands, Housing and Urban Development disclosed.

The minister, who spoke at an interactive session with property editors in Abuja, explained, “to ensure that we reduce the cost of construction, government will give land free to developers. To achieve this, we are partnering with state governments to provide this land and the title is given. At this point, the developer comes in to build and by this arrangement, the cost of land is taken off the cost of the houses so developed”.

She added that they  have  also interacted with manufacturers of building materials like cement, roofing sheets and have negotiated with them not to  give developers materials at the same cost they use to sell to other buyers/end-users, but to sell to the developers at factory prices, hoping that this will also reduce the cost of  building.

“For the low income earners to be able to afford these buildings when they eventually come to the market,  the government has also taken up the responsibility of negotiating with the mortgage operators  to provide mortgage facility for them and this was why the Nigerian Mortgage Refinance Company (NMRC) came on board.   The mortgage banks will pay for the buildings on behalf of the off-takers of these buildings (medium and low income earners) and they will be paying stipends monthly to these banks until the cost of the buildings is defrayed”, she explained further..

According to her, the houses government was planning for the low income people range from N2.5 million to N3.5, N4.5 and N6.5 million per unit, hoping that over the period of 15-20 years, the lowest civil servant would be able to pay up the cost of a house at maybe N2,000, N3,000 or N5,000 monthly. “And for affordability, we are going to control the prices of these buildings”, she assured.

As part of efforts at addressing the housing deficit in the country, the government is planning a national housing survey and according to the minister, this is aimed to establish the actual number of housing deficit in the country instead of relying on forecasts and the quantum of the investment needed to meaningfully address the gap.

“ In the short-term, a pilot study will be carried out in the Federal Capital Territory (representing the best housing case scenario) and another state (that will symbolize the worst housing case scenario) and other states to ascertain the magnitude of the housing deficit in Nigeria”, she said.

This survey, the minister said, would be undertaken by a Ministerial Committee under her chairmanship with relevant stakeholders such as the National Population Commission (NPC), National Bureau of Statistics (NBS), National Planning Commission and the Central Bank of Nigeria (CBN) as members.

The minister who saw hope of a better housing sector emerging from the above initiatives, noted that from the trends they had seen so far, the problem of affordability in the housing market was a key issue in housing deficit.

Article Credit: Businessdayonline

Updated 4 Years ago
 

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