There is a demand for affordable housing in Nigeria. If you are interested in real estate development in Nigeria, this sector could become big in the future. However, the goal of having affordable housing for all is still a distant dream.
However, combined efforts from important sectors can make it possible. What are those efforts? What is the role of the real estate industry in this project? Let’s explore all you need to know about affordable housing in Nigeria.
Why the Need for Affordable Housing in Nigeria?
Nigeria continues to expand in population size. The country looks different from what it was some 30 years ago. The fact that more than half of the country’s population is under 30 makes it even more interesting. Hence, a significant half of the population is in its “starting life” stage.
When you combine that fact with our ever-growing and explosive population, you have more alarming numbers. The country’s population continues to swell thanks to the high fertility rates.
The recent shift in lifestyle and trends has contributed to the demand for affordable housing. There is more rural-to-urban migration. People come to big cities hoping to survive and thrive despite the country’s economic growth.
These factors combine to create a problem in the real estate industry. The bad news is that this problem is significant. By estimation, about 17 million individuals in Nigeria need affordable housing options.
Affordable housing is more than just having a roof over your head. It has to meet the required standard of living, which is in short supply in the country. Hence, the lack of proper housing units affects the individuals and the collective society.
Homelessness, overcrowding of available homes, and the formation of slums are some of the impacts of this situation. The sad part is that these effects escalate over time. On one end, the crime rate increases due to a lack of secure homes. On the other hand, people’s productivity and efficiency diminish.
These obvious issues highlight the need for a housing plan that a young man or woman just starting a life can afford. Admittedly, various government reforms target projects that help to tackle the problem of affordable housing. In the private sector, you also have real estate investors and other private bodies contributing their part to bring affordable housing to everyone.
The Importance of Affordable Housing
Affordable housing is much more than having a roof over your head. These housing options must be standard. Moreover, every individual's basic right is to have a standard housing option. Here are reasons why this initiative is important:
Stability
An affordable house gives stability in more ways than one – stability to settle down and pull efforts into being productive. Having a comfortable place of rest allows one to work properly. That stability is also a form of safety because you feel secure in your affairs. A stable young man or woman in a city can enjoy the protection and respect that a house provides.
Economic Growth
Stability at home will translate to stability at work. Whether as a remote worker, an office worker, or a freelancer, affordable housing makes working easier. The stability makes it easier for the house owner to maintain their health. Poor health status is one of the characteristics of the slums and it has an obvious effect on the economy. But affordable housing removes that issue.
Investment Opportunities
Real estate investment in Nigeria can enjoy the benefits of the affordable housing system. Real estate investors can contribute by building more affordable housing units when there is stability and economic growth. As a real estate investor, you can also create commercial structures or industrial buildings to cater to the needs of the newly stabilized population.
The Challenges of Affordable Housing in Nigeria
If you are a real estate investor, or a developer looking to contribute to the affordable housing demand in the country, there are particular challenges between you and that goal. If you are simply interested in getting a cheap house, these challenges are set to make that difficult.
Financial Challenges
The country’s economic situation makes it challenging to have access to affordable houses. The cost of building remains high and investors have to build with plans of having a profitable return. Real estate investors must deal with high-interest loans, strict terms, and other factors in erecting these structures.
Tenants also face the same financial issues. Sometimes, the housing plans are not affordable because they are overly expensive. The buildings are not inexpensive because the country’s economic state makes it hard to earn a proper living.
Population Growth
The country’s population is another challenge to consider. Two factors contribute to population growth in the cities that need affordable housing. The first factor is the rural-urban migration rate that increases the population of these cities. The second factor is the yearly increase in population through childbirth. The competition for limited resources continues in these big cities. According to estimations, the country's population will double by 2050. This increase will affect the possibility of affordable housing for all.
Lack of Amenities
Many parts of urban areas lack basic amenities such as reliable clean water, good roads, and electricity supply. The lack of amenities makes developing housing projects without additional cost difficult. If an investor is interested in building a standard property, they will have to do more than develop the structure. The undeveloped areas that lack basic amenities are not attractive to tenants. Hence, there is no access to these places.
Is Affordable Housing Possible in Nigeria?
Despite the obvious challenges, the affordable housing project in Nigeria has the potential to succeed. There are major stakeholders in the country that can contribute their part to make it a more accessible reality. Here are some steps or initiatives that can make this goal come alive:
Government Initiatives
Affordable housing in Nigeria can be possible or more feasible if it starts with the government. The good news is that the government has various initiatives or projects like the National Housing Program and the Family Homes Fund. These programs make it easier for private contributors like investors to join the program through participation or financial support.
Partnerships
Combined efforts of the government and real estate investors or developers can help achieve the low-cost housing goal. A joint effort from the government and private agencies helps to maximize resources, knowledge, and capabilities. Sometimes the combined effort is more than the sum of individual efforts. This statement is true of the potential of partnership schemes in achieving the desired goal.
The best part is that the partnership is flexible. Hence, various agencies can explore the options and pick the best.
Real Estate Developers
This option is an opportunity for real estate investors to show their interest. The private sector has become increasingly influential in tackling the pressing issue of affordable housing in Nigeria. Local and international real estate developers have acknowledged the unmet demand in the low-cost housing sector and are committed to creating affordable housing projects.
Conclusion
Affordable housing for all remains a dream. However, it can soon be a reality if the major stakeholders pull in efforts. As a real estate investor, you must understand your role in making this a reality.
There is much potential in this sector. Investors can work with trusted real estate agencies like Land Republic to develop their interest in affordable Housing projects. The agency offers many services to help smoothen an investor's journey in the real estate industry.
