* Calls for research to dimension housing needs

By Yinka Kolawole, with agency reports

A university lecturer, Prof. Tunde Agboola, of the Department of Urban and Regional Planning, Faculty of the Social Sciences, University of Ibadan, has decried the predatory tendencies of private housing developers which has led to distortions in availability of houses in high and low-ends of property market.

The Professor also emphasised the need for industry based research to correctly identify areas of needs so as to produce houses as per market needs.

Agboola, who was represented by Mr Samson Adegoke, Department Of Estate Management, Osun State College Of Technology, Esa Oke, spoke at seminar on “Current Housing Policies in Nigeria and Real Estate Market Prospects for 2011” recently in Lagos.

He said that the real estate market in Nigeria is full of paradoxes, noting that the predatory behaviour of developers whereby they focus on building in the high-end to the detriment of the low-end has led to a situation in which there are over supply of houses in the highbrow areas while there are inadequate houses in the lower end.

“In the high brow areas of Lagos, Abuja and Port Harcourt, empty housing units are on the increase. A paradox. Thus, while there is over supply in the high brow areas, demand is far higher than the supply for low and medium class housing needs. The predatory tendencies of the private sector housing developers which focused on high income housing, with little or no attention to low and medium income housing has led to this paradox of simultaneous surplus and shortage.

The poor administration of the National Housing Trust Fund (NHTF), stringent accessibility conditions imposed on private sector housing developers and poor per capital income among Nigerians, all limit the effectiveness of housing finance initiatives in housing delivery.

“Also, the failure of government to provide the primary infrastructure coupled with high cost of capital has made the maximum selling price of N5 million very unrealistic in most cities in Nigeria. The resultant effect of all these is the emergence of predatory lenders who financed housing projects only in the high brow areas at very high interest rate and of very short tenure.

These eventually led to the attendant surplus, evident by high level of vacancies in high brow locations like Lekki and Ajah in Lagos, Asokoro in Abuja and similar locations in Port Harcourt while low and medium income areas are experiencing shortage of supply far below the demand.

“Today, landlords are accepting lower rents and more generous terms in favour of tenants. Vacancies abound, particularly in the high brow areas of major cities. Conversely, there are high but unmet demand in the medium income housing while there are no effective demand for low income housing. All efforts to stimulate demand for low and medium income housing is frustrated by lack of access and affordability of mortgage, occasioned by lack of collateral and high interest rates. The pricing and selling policies of private sector housing producers have made matters worse.

“All these lead to the paradox of shortage and surplus and the need to review the existing housing delivery system with a view to making it more efficient in its distribution mechanisms. There is therefore, the need for industry based research to correctly identify areas of needs so as to produce what the market actually needed. The idea of cross-subsidy should be encouraged to achieve horizontal and vertical equity in housing distribution.

This is important to safeguard the interest of both the rich and the poor, and to make the housing market inclusive. Keen market watcher today will see opportunities for investments in housing for the low and medium income earners. An investor with futuristic approach will start looking at rent and ownership housing schemes, which will allow tenants to own their houses after 8 to 10 years,” he said.