How to make money from underdevelopment of housing in Nigeria

Shelter as housing is an indicator of success in Nigeria, whether built or rented. However, building one with your money is the height of success and it appeals to people’s mindsets. Shelter cannot be ignored because it is part of how we live. Therefore, besides food and clothing, this is a vital and basic human need.

Housing is an important sector that must be given due attention as it usually improves the economic growth of a country.

However, Nigeria has been lagging behind in providing affordable housing programs for the majority of Nigerians. It is quite difficult for the middle class to afford/build a house. However, they are still trying to do something. Unfortunately for the lower classes, it was a hopeless journey.

Nigeria is the most populous country in Africa, with more than 48% of its population living in urban centers and less than 10% of its land area available for habitation.

Every year, about 4% of the population migrates to towns and cities for a better life. What does it mean? Continued demand for housing, I mean, where are these people going to call shelter?

A housing shortage in Nigeria has caused available rents to soar to 60% of annual income, while the UN recommends 20-30%.

However, this problem can be eradicated. Nigeria is not the only country affected, developed countries are also affected.

Why do we have these problems?

There are many reasons for the housing shortage in Nigeria.

they are;

1. Poverty

Poverty is a disease that devours nations. People can either afford to do something or not. There is almost no middle ground. Affordability is relative. Homes that are considered affordable can be very expensive for some people. In a country where poverty is deeply rooted, it is quite difficult to reach the middle ground.

2. Limited financing channels

Not everyone has housing finance in Nigeria. A large number of Nigerians are simply trying to use their limited income to make this happen. That’s why you see abandoned projects almost everywhere. Some people give it a try, but eventually lose interest when it becomes overwhelming and they don’t see a viable way out.

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3. Rural-urban migration leads to overpopulation in urban centers

Especially in urban centers, this can be difficult to handle given the increasing migration of people day in and day out. In this case, housing demand is paramount, and no matter how many houses are available, it will not be enough. I would like to believe that this is a good business for anyone who is interested in the real estate business and has money. You already have a field trip day.

4. High cost of building materials

Continued inflation and an appreciating dollar continue to impact the cost of building materials. Offers hardly work now because the labor market always increases.

This is very frustrating, especially for Nigerians who are still struggling to raise funds from their income to consider housing projects.

Cement prices in Nigeria are also reported to be around 30-40% higher than those in neighbouring countries or the world market.

So how is it possible to have a great housing scheme in a country like Nigeria?

5. Insufficient or missing infrastructure

Infrastructure such as electricity, water, good roads and good drainage is severely lacking or insufficient. That’s not encouraging for the private sector looking to tap into housing supply.

Although, times are changing, especially in urban centers. At least, there is some level of infrastructure there. Because of the absolute lack of infrastructure, rural areas are so much on the receiving end that whatever the private sector wants to do, stay in urban areas.

With all of this, if you’re thinking about focusing on providing housing as your real estate business, you can speak up. At the same time, Nigeria has a deficit in housing development and the population is increasing every day.

The main agenda is urbanisation, which has thousands of people focusing on towns they think can benefit them. This mass migration has hindered the supply of housing. So, if you can put it on a boat, that’s a good idea.

There may be affordability issues, however, people are doing what they can to have a roof. Mind you, this is a business that requires a lot of money to come together.

Dennis Isson

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