‘Bridging Housing Gap Requires Synergy Between Public & Private Sector’

A recent study confirmed that over 70% of Nigerians, particularly residents of Lagos, continue to live in rented properties. Affordability remains the biggest problem as many people, despite having decent jobs and a fair income, cannot afford the high-interest mortgages offered by Banks.
Adeyinka Adesope, an Executive Director of Grenadines Homes and the Managing Director of Palton Morgan Holdings Company, believes Nigeria can overturn its real estate fortunes for the better. In an interview as published on Ventures Africa, he digs into the discussion surrounding Nigeria’s housing deficit, solving the affordability problem, bridging housing gap and Government policies.
Read excerpts below:

Nigeria is said to require 700,000 housing units annually to meet its housing deficit according to the World Bank. How visible is this?

It is quite visible but would require a lot from the private sector and the public sector. For us to be able to bridge the gap, it’s going to require a lot of synergy, a lot of partnership. Government will have to play a major role, one which does not involve direct construction of houses but by creating enabling environment, providing incentives and good policies, policies that will attract investors, both locally and internationally.

What kind of policies would you like to see the government focus on?

Let’s look at property protection rights for example. Government will have to improve on this because this is going to trigger a lot of activities if addressed in the mortgage sector. When we look at the whole of Africa, amongst about twenty six countries, Nigeria ranks second from the bottom in terms of Protection of rights On property. These are things government can look at; how many days it takes to register a title, giving tax incentives to developers. Like I stated earlier, the government will have to look away from directly providing housing for the people because the population is growing astronomically.

Experts say the greatest problem facing the Nigerian real estate sector is affordability. Do you agree with this?

When we look at the housing deficit we have in Nigeria a larger percentage of these deficits lie at the bottom of the pyramid and it is not because there is no land, it is not because we cannot source for building materials but basically affordability. Everybody wants to leave in close proximity to where they work, and this results in a lot of pressure on the existing serviced plots, serviced apartments and built up areas, which is turn raises prices and makes housing less affordable.  More tellingly, people don’t have finance to buy houses. Even if you can afford to get financing based on your job or your status in the society, you’re probably paying 20% interest which will triple the cost of the house at the end of the day. This I believe is where government comes in.  Now the government has come up with Nigerian Refinancing Mortgage Company (NMRC), which should support financial institutions in ensuring mortgages are offered to people at single digit interest rate. In addition, the government should commit itself to providing infrastructure, particularly in the transportation sector to ease commuting. This would ensure people begin to move outside the major cities, creating new cities in the process and easing the pressure on prices of properties. What you get then is affordability.

Full interview HERE