The Future of Housing in Nigeria: Trends, Predictions, and the Role of Government and Private Sector
Nigeria’s population is rapidly increasing, and its economy is growing, but there is still a huge housing deficit. According to the World Bank, the country needs around 28 million new homes to meet its citizens’ demand. Unfortunately, the supply of housing is insufficient, leaving many Nigerians struggling to find decent and affordable accommodation.
Trends and Predictions
Urbanisation: One of the significant trends affecting Nigeria’s housing sector is urbanization. The United Nations predicts that the country’s urban population will increase from 51% in 2018 to 68% in 2050. As more people move from rural areas to cities, the demand for housing in urban areas will rise.
Lifestyle: Another trend is the changing preferences and lifestyles of Nigerians. As the middle class expands, more people desire modern and comfortable homes that suit their needs and tastes. This presents an opportunity for developers to provide innovative and diverse housing options such as smart homes, green buildings, co-living spaces, and serviced apartments.
However, several challenges are hindering the growth of the housing sector in Nigeria, including:
- High cost of land and construction materials: Land is a scarce and expensive resource in Nigeria, particularly in urban areas with high demand. The cost of construction materials, such as cement, steel, and sand, is also high due to inflation, importation, and taxation. These factors make building houses unaffordable for many Nigerians.
- Lack of access to finance: One of the most significant barriers to homeownership in Nigeria is the lack of access to finance. PwC’s report reveals that only 5% of Nigerians have access to mortgage loans, compared to 31% in South Africa and 77% in the US. This is due to high interest rates, stringent eligibility criteria, cumbersome documentation processes, and low income levels.
- Inadequate infrastructure and amenities: The quality and value of housing in Nigeria are affected by the inadequate infrastructure and amenities, such as roads, water supply, electricity, security, and sanitation. These are essential for creating livable and sustainable communities, but they are often missing or poorly maintained in many parts of the country.
The Role of Government and Private Sector
Collaboration between the government and private sector is necessary to overcome these challenges and unlock the housing sector’s potential in Nigeria. Here are some ways they can work together:
- Providing land and incentives: The government can offer land at subsidized rates or through public-private partnerships (PPPs) to developers willing to construct affordable housing units. The government can also provide incentives such as tax breaks, waivers, grants, or guarantees to encourage more investment in the sector.