With over 26 million housing deficit and the impact of social housing schemes almost non-existent in the country, landlords who build properties for rent are now increasing rental fares astronomically.
This is even as market observers expect house rent to hit the rooftop next year, as the owners of building properties are currently refurbishing their properties with the hope of jacking up house rents by the time they are done with the renovation.
Our correspondent who went around some areas in Lagos, Port Harcourt, and even areas in the FCT like Lokogoma, Apo resettlement, Kubwa, especially the outskirts of the city of Abuja like Karu, Nyanya, Mararaba confirmed not less than 85% increase in rent.
Our Findings further revealed that landlords have adopted a model of gradual renovation of their properties, in which, they renovate apartment where former tenants left, put tiles on the floors and walls, paint the walls, fixes better windows and doors, and do some minor renovation and after, increase the rent by 80 to 100 percent.
In this instance, it was confirmed that tenants in such properties don’t pay the same house rent, as renovated apartments are costlier than the ones that are yet to be renovated, even though the apartments are within the same building.
With the coming of the new government, the city center has witnessed over 100% in the cost of rent for both commercial and residential houses.
However, lately, residential areas have been more affected due to the influx of more people coming to the seat of power, and now with the level of inflation prices have increased by not less than 85%, Africahousingnews reports.
An Abuja tenant, Mr Sanusi Abubakar, who just moved out of a Room and Parlour Self Contain apartment in Kubwa, Abuja said, he paid N300,000 per annum before he left, but that after he packed out, the landlord renovated the apartment and he is now putting it up for N450,000 per annum.
The real estate market is gripped by a surge in rental cost, high cost of living, forex shortage, dollar hike, high cost of input materials, and galloping inflation, a situation that has pushed housing conditions to crisis levels, forcing many young and promising Nigerians to be homeless or live in squalor and rural parts as real estate experts urged governments to prioritize housing and cost of living concerns.
To eliminate the worst manifestation of poverty, researchers warn that government data of the 200 million population is underestimating the number of housing shortages across the country, forcing more citizens in the country to live in squalor, makeshifts camps, obstructions, and slums due to the pressures on the few affordable housing units.
While experts said it is the responsibility of governments to provide housing for the poor and vulnerable people who have special needs, they urged players in the private sector to also come to the rescue.
Social housing is the term given to such accommodation usually provided at affordable rates, on a secure basis, to people on low incomes or with particular needs, adding that such houses are usually owned by the state, in the form of councils, or by non-profit organizations such as housing associations.
However, the combination of a growing urban population at a fast-paced urbanization growth means enormous pressures are on the few available social housing intervention schemes.
This is also because the housing stock in the country is just a little above 13 million units and home ownership is just about 25 percent of the country’s estimated 200 million population.
Speaking on this social housing scheme, minister for Housing and Urban Development, Ahmed Dangiwa, said, the prices were beyond the reach of the target market – low to medium-income earners, and the locations were inaccessible.
He added that the situation has tied up significant government funds, and without swift action, these houses could begin to deteriorate. “One assurance I can provide is that, under my leadership, I will prioritize affordability in house design and delivery.
“In the case of this specific project, we will carefully study and review the factors that led to the current pricing and determine the best approach to make these houses accessible to Nigerians. The goal is to promote affordability, attract potential buyers, and ultimately ensure that these housing units benefit Nigerians,” Dangiwa said.
Reacting, Architect and estate consultant, Wale Babatunde, said, that social housing is literally non-existent in Nigeria at the moment as governments at both federal and state levels have faltered on schemes planned to deliver such houses while private investors remain indifferent to developing for people who need such houses.
Also speaking, former REDAN Auditor, Southwest, and managing director of Rocccio Carillo Property Investment, Mr. Emmanuel Oyelowo noted that, since Shagari and Jakande administration, whatever any government has said or done as social housing or low-cost housing has ended up as mere paperwork or political statements aimed to achieve selfish interests.
According to him, “While private developers say they don’t want to build social housing because they spend a lot of money to acquire land and the cost of building materials is high, the governments who seem to be competing with the private sector say they also buy materials from the same market.”
Several attempts have been made by the government to address the housing needs of low-income Nigerians through the establishment of mortgage institutions that offer low-interest rates on housing finance. But over time, it has turned out that what the government considers its best is not good enough.
Immediate past minister of works and housing, Babatunde Fashola once said, the government could not deliver low-cost housing, citing the high cost of input materials and scarcity of land, especially in states like Lagos and Rivers where land is in high demand and attracts high prices.
As part of its response to the adverse impact of COVID-19, the Muhamadu Buhari administration had earlier set aside N200 billion for a social housing scheme as one of the planned schemes under the Economic Sustainability Plan (ESP) which was a midwife by the former vice president, Yemi Osinbajo who led the Economic Sustainability Committee. To date, that scheme has not produced the desired result.
Also, the N200 billion which was approved by the Federal Executive Council (FEC) and supported by the Central Bank of Nigeria (CBN) was aimed to provide 300,000 low-income houses, as well as create 1.8 million jobs in the process. Reports on this intervention are neither here nor there.
The Buhari administration also made an attempt at providing social housing with the setting up of the Family Home Funds (FHF). When the fund was launched in 2017, it came as a social housing intervention programme with the mandate to raise and invest, within five years, N1.3 trillion for the development of 500,000 homes for people on a low income.
The expectation was that the fund would, in the process, create up to 1,500,000 jobs and enable homeownership through its creative products.
The available record shows that, to date, FHF has financed the development of only 11,700 homes for low-income earners across some states in Nigeria including Delta, Ogun, Kano, Nasarawa, Kaduna, Yobe, Bauchi, Borno, Adamawa, and created just 64,000 direct and indirect jobs in the process.
When the Nigerian Mortgage Refinance Company (NMRC) and the Family Homes Funds (FHF) came on board, many Nigerians thought that they would change the country’s home-ownership story.
NMRC came as a secondary mortgage institution that is private sector-driven but with the public purpose of enabling the delivery of affordable housing by increasing liquidity in the mortgage system and dragging down interest rates on mortgage loans to single digits.
Recall that the company was planning to offer long-term loans at a single-digit interest rate that is expected to come down to 4-6 percent in the long run. Nigerians were told that, on a yearly basis, 750,000 homes would be added to the available stock, thereby reducing the deficit. That is yet to happen six years later.
On its part, FHF came as the government’s social intervention in the housing sector. With its N1.3 trillion funding, it was expected to deliver 500,000 housing units and in the process create about 1.5 million jobs, all happening within a period of five years.
To date, the funds, which started operations in 2017, have financed the development of about 11,700 homes for low-income earners across several states in Nigeria and have created about 64,000 jobs.
This is just as the chief executive officer, CEO JJ&J Property Management Consultant, Mr. Ezekiel Oke said the looming surge in interest rates is expected to drive a substantial 5.5 percent growth in property prices nationwide. He lamented that the surge in interest rates will exert greater pressure on rental prices than on house prices.
Ezekiel Oke revealed that, apart from incentives such as tax holidays for young thriving businesses, “we also urge the government to deal with issues such as urban and rural roads, high-interest rates, and high cost of building materials; Land Use Act, and high poverty levels in the country.”
