Home » Real Estate » An Overview of Housing Demand and Supply In Nigeria
Housing demand

An Overview of Housing Demand and Supply In Nigeria

The migration of people from rural areas to urban centres has been increasing at an alarming rate. This has resulted in an increase in housing demand in most of our urban centres in Nigeria. The failure of the government on housing demand and supply is the focus of this article.

Housing demand can be explained as the willingness and ability of housing consumer to pay for a particular dwelling depending upon such consumer’s income, house type, location preferences and local prices.

Demand is the quantity of good or service that consumers are willing and able to buy at a given price at a particular given time period. Demand for housing at certain price refers to the value that is placed on a house linked with the satisfaction derived in such house. In economics, this is termed as utility.

Housing supply on the other hand is produced using land, labour and various inputs such as electricity and building materials. The quantity of the new supply is determined by the cost of these inputs, the price of the existing stock of houses and the technology of production.

The rate of urbanisation in Nigeria is remarkably increasing, especially during the oil boom period which has consequently led to an unprecedented increase in population and resulting in high demand in housing.

Both government and individuals are being so concerned in the provision of both quantitative and qualitative housing to meet the demand of the ever increasing population in Nigerian urban cities. Albeit, the efforts of the government at all levels (Federal, State and Local) and individuals in making provision for an adequate housing unit for Nigeria populace has not yielded fruit.

The problems of inadequacy of the building materials, indigenous landowners, inaccessibility to funds, exchange rate and so on, are the major constraints that led to price increases of the housing construction which has consequently made it impossible for people of low income or middle income to acquire their personal house.

Housing demand in urban centre is a manifestation and reflection of different household desires to live in an urban centre. The desire of people to live in an urban centre especially in Lagos, is increasing at an alarming rate. Lagos for instance has a teeming population that exceeds the resources inherent, and the city of excellence may indeed witness a population explosion if urgent measures are not taken to curtail it.

Various reasons have been attributed to an increasing taste for urban living and these reasons include employment opportunity, urban amenities and utilities consumption opportunities. This situation has consequently led to housing shortage and most people are also found living in indecent building apartments due to their socio-economic background which cannot cope with an ever increasing price of decent houses.

Housing is in inelastic supply in some cities either through little or no open land, restriction of local regulations on development that make it prohibitively expensive or slow. The materials cost of building, unbearable conditions on getting loan from the mortgage banks and government policies have been factors militating against the achievement of the effort of public developers and private developers, that is the government and individuals in bridging the gap in housing supply and demand.

Also, the time of housing process is another factor that affects the supply of housing to meet the demand. The complexity and time duration in housing supply is one of the major problems which contribute to the shortage of housing supply to different socio-economic status of housing consumer.

The time of housing process would not allow the housing supply to meet the housing demand as a result of increase in urban population compared with the time period it would take for housing delivery to be taken place into the housing market for the consumption.

Housing takes long time to construct and cannot easily be made ready for consumption if there are changes in demand. There is need for proper understanding of the nature and complexity of housing production for the purpose of solving these problems.

The failure of the private sector housing to accommodate the larger percentage of the populace most especially the poor, necessitated the direct public housing delivery option. Housing supply does not only reflect the ability to build; it also represents the historical stock of the past construction. Some cities such as St. Louis, Detroit and Philadephia in USA, have an abundant supply of homes because they once were more desirable than they are today.

In these places, housing prices can often be lower than the cost of new construction, because of the abundant supply. Many attempts have being made both by individual and government through various programs in solving housing problem in Nigerian urban centres.

However, the problems of housing supply in meeting the ever increasing housing demand remains one of the most pressing problems facing Nigerian urban centres.

However, to increase housing delivery in Nigeria, it is recommended that we embrace the use of indigenous building materials and technology, habitable houses are provided at subsidized rate and there is an amendment of some parts in the land use act of 1978.

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *

*