Property Developers in Nigeria have said that building low-cost houses and putting on the property market for low-income earners is not possible in the country as such a venture is not economically viable.
Despite insistence by other stakeholders that building houses that low-income earners can afford is possible and economically viable, some of these profit-driven investors insist that it does not make economic sense, citing the cost of land, building materials and high-interest rates.
Lagos State chairman of Real Estate Development Association of Nigeria (REDAN), Bamidele Onalaja affirms that it will be difficult to have, for instance, a N2 million house on the market without the government providing the land.
He stressed that land remains a big factor in house production, hence the need for government to do more by providing free lands. However, the government says there is no free land.
According to the REDAN chairman, part of the reasons houses are costly in Nigeria is because of the price of land which, he explains depended on location and building materials.
This validates findings by the Centre for Affordable Housing based in South Africa that the lowest cost of a house produced by a private developer in Africa at the cost of $8,000 (about N2,999,900) is affordable to only 26 per cent of the urban population in Nigeria.
At a press briefing recently, group executive secretary, Adron Homes and Properties, Ayodeji Ojo-Omoniyi notes his company would build affordable houses instead of low-cost housing because they were in business to make a profit and not to solve other people’s problems.
Ojo-Omoniyi stressed that their focus was on middle-income earners whom they deliver decent and quality houses. They find ways of making purchases easy for them through flexible payment plans and discount sales strategies.
Executive director at RevolutionPlus Property Development Company, Tolulope Onalaja, says low-cost housing was not possible in Nigeria because of cost and time of property registration and documentation. He called for speedy processes for land titling and documentation which still has no time frame for transactions.
She advised that the “government should give a time frame for getting titles and allow for more coordinated ways of searching and getting titles.
“Government still has a lot to do as regards the Omoonile malaise, and property taxation, which is killing businesses. They should give tax holidays to companies and encourage private businesses that are still trying to survive.”
The minister of Works and Housing, Babatunde Fashola (SAN), at a media programme in Abuja recently, was of the view that going forward, every decision taken in the housing sector has to be driven by hard data and adherence to market segmentation.