Moderator: Ayo Ibaru, COO / Director, Research – Northcourt Real Estate.
Speakers: Femi Adewole, Lead Consultant, Urban Economics International; Tola Akinhanmi, Head, Real Estate Finance – Stanbic IBTC; Maurice Okoli, CIO, Housing Solutions Fund; Oguche Aguda, CEO, PENOP.
Over the years, the Nigerian housing market has struggled to meet the growing need for shelter. The cost of building a house has continued to surpass the average potential buyer’s income leading to an absence of effective demand, which also results in a low housing supply. An upside to the efforts towards boosting housing finance is the involvement of the capital market and other housing institutional reforms such as the Family Homes Fund (FHF), the Nigeria Mortgage Refinance Bank (NMRC), and the Nigeria Mortgage Guarantee Company (NMGC). These give substantial room for hope in bridging the wide demand-supply gap in Nigeria.
The concept of affordability must be defined in its true sense, and the creation of housing products that match the affordability of the low-minimum wage citizen must become the focus of the housing finance institutions. There is an urgent need for a more focused approach geared towards reforming our land policies, and introducing a workable subsidy framework for housing market segments can have a cushioning effect. Recent years have seen millions of dollars incurred in importing construction materials into the country, leading to high construction costs. An upward trend is expected as the naira continues to depreciate with no consideration for potential buyers’ income. This begs the need for a campaign around the improvement of local manufacturing and production platforms.
Towards a public-private sector synergy, incentivizing the private sector and decentralizing the public sector can be considered. Both sectors must begin to work together for any hope of success to be in sight. While the government focuses on providing an enabling environment by introducing fiscal incentives, its private counterpart should be the lead delivery partner of an effective housing program. Removing the value-added tax (VAT) on new housing construction is an immediate private-sector incentive to be employed.