By Cosmas Omegoh
At the moment, it is becoming increasingly difficult for the average Nigerian to own a house. And sadly, the chance of owing a house either now or in the near future is getting slimmer by the day. That wish is looking as difficult as water flowing uphill.
From the Nigerian building industry itself, there are sad stories that things are not going right. The sector is experiencing a downward swing. Active players in the industry say there is now a certain air of doom and gloom enveloping their once flourishing sector. Some indices there point to a bleak future.
For the average Nigerian currently plagued by poverty, the stories being told about the housing sector is not a good one. Everything about the tales suggests that the hope that the poor might someday soon own a house of their own is looking more like a mirage than reality. And now, housing – which is a necessity in life – is increasingly getting out of the reach of many. That is the story; and that is the truth.
Some days ago, the Chairman of the Nigerian Institute of Builders (NIOB), Abuja branch, Mr Peter Omale, while speaking on the current challenges befalling the average Nigerian, laid out the reality philosophically.
He said: “It has become easier for a big elephant to pass through the eye of a needle than for the average Nigerian to build a house now.
“How do they intend to do that? How do they save to build a house?
“Sadly, the mortgage system is not working. Since they are not working, the scheme is not supporting to bridging the so-called housing deficit.
“If you go around, you will notice that some of the structures where people are living in are not habitable at all.
“But with this current high rise in the cost of building materials, it is becoming a lot more difficult for people to erect what one might call a house.
“The situation is grim; it is becoming much more challenging for people to provide shelter for themselves even at that lowest level which ordinarily we might consider uninhabitable.”
Mr Tayo Olowolagba, a young building contractor, based in Lagos, painted even a gloomier picture of the unfolding scenario.
His words: “The prospect of the average Nigerian building a house now – taking into consideration the prevailing circumstances in the building industry – I’m afraid, it is zero.
“For someone earning between N100,000 and N200,000 yearly in today’s Nigeria, that is very, very difficult.
“Where will the individual start from? Mind you such a person is living in a rented accommodation. They have to first pay for the accommodation. They probably have children. They feed, they clothe, pay utility bill,…aah, they cannot build; where would they start from?”
He expressed sadness that governments at various levels are not addressing this impending crisis. “These days, low-cost houses are not being built for people to either buy or do mortgage.
“And so, for the poor, how long will it take them to save and build a house?
“For one to be able to construct a two-bedroom bungalow now, it will take an average of N10 million given that they have a plot of land ready.
“As it is, if you don’t have up to N10 million, you cannot build such a house. That I know too well,” he said.
In an article, Nigeria’s Housing Deficit: A Recurring Malady, the Nigerian Institute of Estate Surveyors and Valuers (NIESV), Lagos State chapter, recently raised an alarm, warning about the worsening housing crisis.
It revealed that “Nigeria’s housing deficit is due to the high cost of building materials, poverty, increasing population, poor access to the mortgage and high rate of urban migration.”
The body, quoting BizWatch Nigerian revealed that “Nigeria has a 17 million housing deficit – the highest in Africa – with an urbanisation rate of 4.78 per cent.”
NIESV also quoted its National Chairman, Adedotun Bamigbola, lamenting the challenges plaguing the construction industry in the country.
He reportedly regretted that most construction materials are imported, adding that “we have a construction industry that is highly susceptible to importation and, therefore, foreign exchange plays a huge role in the delivery of housing in Nigeria.
“Where you see fluctuation in terms of forex in Nigeria, definitely it will affect the cost of construction; it would definitely affect the prices of property. It is a bandwagon effect.”
He noted that “until we are able to get to the root of it, and promote the local industry in all areas of building material component, we may not be able to close the gap in the country’s housing deficit.”
Speaking at a forum lately in Abuja, the Speaker of the House of Representatives, Mr Femi Gbajabiamila equally acknowledged that Nigeria’s housing deficit crisis is becoming alarming, while disclosing that the country needs N6 trillion to bridge the divide.
Gbajabiamila estimated the current housing deficit to be within the region of 17 and 20 million housing units, while also lamenting that the number was increasing annually by 900,000 units.
Speaking through the House Leader, Hon. Alhassan Ado Doguwa, he said: “Access to decent and affordable housing is one of the primary indicators of such economic empowerment.
“With the current housing deficit in Nigeria, which is estimated to be between 17 and 20 million housing units and also said to be increasing annually by 900,000 units, the potential cost of overcoming this deficit is about N6 trillion.”
People abandoned their projects
While further explaining how grim the situation is becoming, Olowolagba told our correspondent that the situation in the Nigerian construction industry is dire. According to him, “now, it is only those in the Diaspora that are doing more of construction than everyone else living in the country. And the reason is obvious: the exchange rate.
“The reality before us is that there is no money anywhere.
“All my clients who were hitherto building houses have all stopped because there is no money for them to continue. Their projects are at a standstill.
“Some people who earlier showed interest in building houses or started works on their projects now can no longer continue.
“Most of the people who were at the verge of completing their projects before the hard times set in have all stopped. They can no longer continue; they are putting their property up for sale.
“But ironically, those showing interest in buying those property have no money to do that. I have some clients who want to sell off their building, but cannot see buyers. I have clients who want to buy, but don’t have enough money to pay. That is the situation.”
Omale equally recalled that “right now, a lot of people have abandoned their housing projects because they cannot continue.
“If you look at some developers, they are suffering. Some of the projects they had have been rubbished by inflation. Some probably collected a two-bedroom project for N10 million. Now, the cost would have risen to N17 million; who bears the deficit?
“If a man gave you his deposit, hoping to pick his keys soon, and now, you are having a deficit of N7 million, definitely the project will be grounded. That is why we have so many abandoned projects around. They remain stalled pending when the contractor receives more funds to continue,” he explained.
Housing crisis in Lagos
Meanwhile Chief Francis Onuoha, managing director of Frankmore Real Estate and Agency Ltd based in Lagos has lamented over the impending crisis in housing especially in the city.
“To tell you the truth, Lagos is full and bursting at the seams with people right now. Every day you see people streaming into our office asking for accommodation – living room and shops.
“Sometimes, I get shocked when people tell us they simply want a place even without kitchen or toilet facility – just to lay their heads after the day’s labour. It is both surprising and amazing. But that tells you the impending disaster that is to come if something is done urgently,” he said.
More challenges for housing in Lagos
Over the years, Omonile (sons of the soil) factor has been adding to the high cost of building houses in Lagos.
Recently, their activities have heightened in Lagos and Ogun states.
Olowolagba disclosed that “in some parts of Lagos they come knocking on your door, asking you ‘who dey here. Na we be the Jagaban of this area. Give us our money if you want to do your job in peace. Some of them work for some politicians in the area and enjoy their support.
“If you don’t want trouble, you go and settle them with a lot of money. They bill you based on the value of the property you have bought. In some instances, they grind N2 million off the pocket of a builder.
“Even when you buy land from some real estate agencies who settle the Omonile ahead of sales, what you will be paying them will even be far more than what the Omonile will be collecting from you.”
Building cost, rent depends on location
Olowolagba further said that the cost of building and rent especially in Lagos and other adjoining states now depends on the area and value of the construction.
“Some areas in Lagos have very difficult terrains. So, the cost of building there is very high. It is different from building on dry and solid grounds.
“In some areas, people put their property on rent at that rate they built them.
“In some instances, some Yahoo-Yahoo boys take the houses; then after a while, they might not be able to pay again,” he said.
In Lagos, according to Chief Onuoha, rent is already shooting through the roof – largely as a result of the burgeoning population.
“In Okota area of the city,” he noted “a two bedroom flat now goes for N650,000, N700,000 per annum.
“In the heart of Surulere, similar apartment now goes for N700,000 upward per annum.
“At Lekki axis, the rents differ. One can get a two bedroom for N2 million, N4 million depending on the location and taste.”
He also disclosed that because of rising demand in accommodation, “some landlords have begun to convert their property to mini-flats so as to make more money.
“More people who can no longer now afford rent for flats are going for something cheaper; after all they will serve nearly the same purpose.”
Cost of building materials too soars
Olowolagba is unhappy with the rising cost of building materials as a result of the dwindling value of the naira.
“Right now, the cost of every component in building construction is getting very high by the day starting with cement, rods, sand – name it. The inflation rate is climbing above 100 per cent.
“At the last time I checked, a bag of cement sold for N4,200. Christmas is not here yet. By the time we get close to December, it might hit N5,000 per bag,” he said.
Way out of the housing crisis
According to Olowolagba, “the government needs to improve the rail transport so that people will live in Ibadan and work in Lagos. By so doing, the pressure on accommodation in Lagos will be reduced. People who cannot afford the rent in Lagos can easily move to Ibadan.
“But even at that, what is the cost of transportation by rail from Ibadan to Lagos? “At N2,500 per ride and the same back, how much will the individual earn?
“Even now, the rent in Ibadan is on a steady rise. A two-bed room apartment in Ibadan now goes for N400,000. A mini-flat now goes for N250,000.
“Already people are leaving Lagos to settle in Ibadan. That is also increasing the pressure on accommodation in the area.”
Even in the face of the looming crisis, Omale advised developers to “ensure that you don’t use substandard materials to build their houses.
“And for the contractor, ensure that you have the requisite funding before you go into a project. Abide by the standard procedure for construction so that you don’t lose the investment as a result of building collapse.
“In Abuja right now, everybody is cutting down cost by returning to flat roofs. It is cheaper to run it that way. We don’t have snow in Nigerian, so why are we having such high-pitch roofs?”
For the average civil servant, he advised that they should go into cooperatives.
“That way they leverage the resources of one another depending on what they want. That is a way out,” he advised.
Fear over housing crisis
According to Omale, “what we are having in the construction industry is a value chain. The sector is a major employer. When we don’t have the youths actively engaged, it is a big problem. Those of us who are employers, every day these youths call us to see if there is anything for them to do. But sadly there is none.
“Those who don’t have the patience might fall into crime.
“Now jobs are being lost; there is depression. Businesses are closing down.
“Worse still, the houses are not there for people to live in. It is a tough one for the country and indeed everybody.”