The real estate sector has witnessed regulatory changes with the potential to influence housing market operations. The nature and extent of those changes were huge, affecting building and construction activities. Nevertheless, the housing ministry is drumming support for its reforms, and expressed commitment to delivering on its promise to Nigerians, while some experts want the government to lower building materials’ prices, uplift lives and boost economic development, CHINEDUM UWAEGBULAM writes

As the Bola Tinubu administration clocks one year, the government finds itself at a pivotal political juncture, where the prevailing winds of change are sweeping across the housing industry, driven by a populace increasingly vocal about economic disparities, housing affordability, and social justice.

Under the current All Progressives Congress (APC) government, several policies and economic factors have played pivotal roles in shaping the property market. The government’s approach has largely focused on stimulating economic growth and maintaining the country’s status as an attractive destination for foreign investment.

Amidst this backdrop, the property market, particularly the commercial real sector, has emerged as a barometer of the nation’s economic health and social equity. The inflationary trend and exchange rate have combined to create economic conditions, where uncertainty is the only certainty.

Over the past year, the real estate sector has experienced a variety of shifts. Currently, the soaring prices in the property market have pushed up rent in major cities and increased new home prices by over 37 per cent beyond the low- and medium-income earners, thereby raising questions about housing affordability and inequality.

Though the affluent areas across the country, especially in Abuja, Lagos, Port-Harcourt and Kano are characterised by high-value residential properties, the fluctuation of the country’s naira against foreign currencies has made it difficult for the market to attract international buyers and new investors, especially in the retail sector.

Consequently, the market has been sluggish and new builds are rarely found in some locations due to the rising cost of building materials such as cement, iron rods, sand, granites and finishes. The materials’ prices, which were within reach several months ago have almost doubled and made many property developers exit sites, halt projects and scale down developments.

Economic factors such as high interest rates have also played a crucial role. It has kept borrowing costs high, and thereby fuelling low supply in the property market. Some developers have continued to hike the prices of their off-plan sales due to currency fluctuations, while others adopted dollar rates for new apartments.

In reaction, the Minister of Housing and Urban Development, Ahmed Dangiwa, said the ministry’s broad strategy was centered on three core pillars of Tinubu’s Renewed Hope Agenda, including growing the economy, lifting 100 million Nigerians out of poverty, and creating an enabling environment for investments to thrive.

He stressed the government’s commitment to delivering on its promise to Nigerians, adding that the ministry has achieved significant success in the areas of affordable housing provision, slum upgrade, and the implementation of sector-wide reforms to position the housing and urban sector as a critical enabler of social and economic prosperity for Nigerians.

To lower the cost of building materials, the minister said the government is working to boost building materials manufacturing in the country. “This will ensure economic growth, create jobs, and reduce dependency on imports, while we inaugurate a Building Materials Manufacturing Task Team. They will conduct a thorough assessment of the current state of the building materials manufacturing sector and produce a strategic plan for reforming the sector.”

“To increase the stock of housing supply, we also inaugurated a Multi-Agency Project Delivery Team. The team will ensure that all housing agencies work together towards optimising their strengths to deliver decent and affordable housing to Nigerians. We are also working to implement the much-needed reforms that will ensure quick, easy, and efficient access to land,” Dangiwa said.

While emphasising the seriousness of the ministry in leaving no building unoccupied, Dangiwa explained that steps have been taken to fast-track the sale and occupation of housing units under the National Housing Programme, using four windows of subscription, namely outright payment, mortgage, Rent-to-Own, and installment payment.

He revealed that a total of 6,612 housing units of various house types are currently under construction nationwide as part of the Renewed Hope Cities and Estates programme launched in February this year and designed to deliver 50,000 housing units in the first phase.

“The cities will have 1,000 housing units per site in one location in each of the six geopolitical zones in the country and FCT, while the estates will have 500 housing units per site in the remaining 30 states,” he said.

Speaking on affordability and convenience, he said: “We have designed the cities as integrated living communities targeting all income brackets. They comprise one-bedroom blocks of flats, two-bedroom blocks of flats and three-bedroom blocks of flats; two-, three and four-bedroom terraces, four-bedroom duplexes, and five-bedroom duplexes.

“On the other hand, we have conceptualised the estates to cater to low and medium-income earners. They comprise one, two, and three-bedroom semi-detached bungalows. To enhance affordability and ease of off-take, we used organic designs, where one-bedroom can be expanded to two-bedrooms and three-bedrooms as the income of beneficiaries increases over time.

“We received a total of 8,925 Expression of Interest. This comprises 1,294 for outright purchase, 2,408 for a mortgage, 2,184 for Rent-To-Own and 3,039 for installment payment. We released the first batch of offers of new provisional allocation letters for outright payment for successful applicants,” he explained.

The minister further revealed that the ministry is targeting a total of 26 areas nationwide for slum upgrading and urban renewal, with four in each of the geopolitical zones and two in the FCT. “The key services to be provided in these sites include water supply, solar streetlights, rehabilitation of access roads, construction of drainages and waste management and sanitation services amongst others,” he remarked.

However, the President, Nigerian Institute of Town Planners (NITP), Mr Nathaniel Atebije told The Guardian“I have not seen any realistic effort towards housing Nigerians in the first year of this administration. It has only been propaganda of launching programmes without any plan.

“There are some attempts at urban development in terms of infrastructure improvement. We shall continue to say that any development not preceded by planning done by the right professionals is a misdirection of resources. For urban development, it will end up in creating glorified urban slums.”

According to him, “affordability of housing has skyrocketed, increased homelessness, quality of housing environment is continuously degenerating and poor sanitary conditions in residential environments. These are definitely below expectations. Housing is being politicised rather than planned and delivered pragmatically. Poor consultation with critical stakeholders, poor budgetary provisions and lack of strong political will.”

“We need a National Housing Summit to chat a way forward. A realistic housing policy needs to be crafted and implemented. Stakeholders and prospective beneficiaries need to be consulted. Physical plans must be made before implementation. Infrastructure must be provided before building the houses,” Atebije added.

A Professor of Estate Management, University of Lagos, Timothy Nubi, urged the government to provide a conducive environment for private individuals to build their homes. According to him, 90 per cent of the houses in the country were built by private individuals.

He suggested the intervention of the government to bring down building materials’ prices, especially cement and iron rods, as well as the establishment of bulk building materials purchasing companies. He also recommended tax waivers or tax holidays for building materials producers to enable them to reduce their production costs.

Nubi noted that the problem of housing won’t be solved by building new cities, but rather by scaling up home-improving loans and urban regeneration projects, adding that the current projects by the government are not holistic.

For the Housing Development Advocacy Network (HDAN), the Federal Government should declare a state of emergency in the housing industry amidst the looming housing crisis in the country.

The Executive Director, Festus Adebayo, said the government should take a more pragmatic approach to the housing situation, saying the discovery of people living under bridges in Lagos State mirrors the housing deficit in Nigeria.

He said: “Economic downturn has further added pressure to the housing industry, as citizens are now subjected to difficult and inhumane conditions.”

HDAN also condemned the creation of numerous bottlenecks for estate developers to navigate before obtaining building approvals. It also criticised the requirement of multiple payments, which undoubtedly acts as a barrier to the delivery of affordable housing. “This may explain why many estate developers resort to evasive measures and manipulations to reduce costs,” Adebayo added.

The Managing Director, Nigeria Integrated Social Housing (NISH) Affordable Housing Limited, Dr Yemi Adelakun, said the president’s decision to have a separate ministry for housing and urban development reinforced the Renewed Hope Housing Programme.

He said it is too early to evaluate the administration’s performance in housing in one year as the key performance indicator is the number of houses developed, delivered and occupied at affordable prices.

“The partnership agreement with the consortium is in the right direction. This partnership arrangement is a better approach than the contract award method employed by the last administration. Similarly, the housing portal recently launched will be an added driving force in matching housing supply with demand.

“However, financing intended off-takers may be a challenge if adequate provisions are not made for fund adequacy, accessibility and affordability. Partnership arrangements with other consortia should be encouraged for scale, speed and competitiveness rather than engaging with one consortium across the country.

“Transparency and accountability as to the terms and execution of the partnership agreement should be the norm and not the exception. Domestic production of building materials must be incentivised and promoted, while capacity building for professionals and artisans in the built industry is a requirement for the success of the renewed hope housing programme of the current administration,” he said.