Nigeria’s housing market
Despite being the largest economy in Africa, Nigeria’s housing and construction sector only accounts for about 3.1% of GDP, according to a Global Property Guide study from 2014.
Housing construction is about 100,000 units per year for a country of over 170 million – the largest population in Africa. According to the World Bank, the country has a housing deficit of about 17 million units and needs about 700,000 additional units each year for the next 20 years.
There are three main structural reasons for the state of Nigeria’s property market: property registration is expensive, housing construction is handicapped by high costs, and few can access mortgage finance.
Insurgencies have hit the North’s property market
The Islamist insurgency in Nigeria, with historical roots harking back to 1995 has resulted in thousands of killings, with deaths sharply increasing in recent years as conflict between the Islamic group Boko Haram and the secular government continues to grow. Terrorist activities and insurgency have scaled down in recent months – but the damage has left an estimated 2.5 million people displaced in the region since 2009 and 7.5 million need humanitarian aid to survive.
The Muslim-Christian clashes have hit Northern Nigeria’s property market. Many residents in widely attacked areas and known terrorist hotspots (like Maiduguri, the Borno State capital, Yobe and Adamawa) have fled to other parts of the northern region, while some have left the region for good.
Investors and former residents are slowly trickling back into the North’s major cities since the Nigerian military joint task force has decreased some of the insurgents strongholds in the region. These investors are reanalyzing the potential for property investments in cities like Maiduguri. Nevertheless, security threats have resulted in loss of investment appetite by real estate investors and continues to hamper growth and housing delivery in the property market.
With most Nigerians living on less than 2 dollars a day the hope is that programs can be implemented for social housing.
PM New Nigeria reported on Sunday ahead of the Affordable Housing Summit which opens Monday in Abuja, the Minister of Power, Works and Housing, “Babatunde Fashola SAN, has given insight into how the Federal Government plans to achieve a sustainable housing program for the country.”
Fashola noted, the focus will be on standard design construction while recognizing cultural preferences and the nation’s geopolitical zones, adding “industrialization and mass housing can be possible.” Fashola, said the little over N30 billion allocated to housing in the 2016 Budget would not solve the nation’s housing problem, adding that “the government was desirous of delivering a plan that would work beyond its tenure”.