Bridging Nigeria’s 21 Million Housing Deficit: N5 Trillion Needed Annually For 2.7 Million Units

Nigeria is currently facing a significant housing crisis, with a staggering 21 million-unit deficit. This challenge looms as the nation’s population, now at 220 million, continues to grow at an annual rate of 2.5%. Moreover, urbanization is accelerating, with the United Nations predicting that 60% of Nigerians will live in cities by 2030 unless urgent action is taken.

The Scale of the Housing Gap

Despite the massive shortfall, numerous luxury housing units remain unoccupied across the country, particularly in estates developed by private firms. The high cost of these properties is a major deterrent. Additionally, there are countless abandoned housing projects by both the government and private developers.

To close the 21 million-unit housing gap, experts estimate that Nigeria needs to invest over ₦5 trillion annually and construct 2.7 million housing units each year for the next decade.

Insights from Real Estate Experts

Speaking at the Africa International Housing Show in Abuja, stakeholders revealed that the housing deficit might be closer to 20 million units. However, bridging this gap still requires constructing 550,000 units annually, demanding an estimated ₦5.5 trillion investment per year. This figure represents a significant opportunity for investors in Nigeria’s real estate market.

Nuel Osilama, Vice President of the Real Estate Developers’ Association of Nigeria (REDAN), emphasized the importance of a collective effort:

To address the deficit within 10 years, every state must build at least 56,000 housing units annually.
If the target is extended to 20 years, the country needs to build 1 million homes annually.

Challenges Contributing to the Housing Crisis

Abandoned Projects: Fluctuating exchange rates and rising costs of imported building materials have led to many abandoned projects. For instance, a project initially estimated at ₦1 billion may now require over ₦2 billion to complete due to inflation and currency devaluation.
Luxury Over Affordability: Many unoccupied homes are luxury accommodations beyond the reach of average Nigerians. Developers often build high-end properties for wealthy investors rather than affordable homes for those in need.
Economic Factors: High construction costs, limited government subsidies, and inadequate support for local manufacturing of building materials exacerbate the problem.

Solutions to Revitalize Housing Projects

Government Subsidies: Subsidizing building materials and supporting alternative materials developed by agencies like the Nigerian Building and Road Research Institute (NIBRI) can lower construction costs.
Property Tax Implementation: A robust property tax system could discourage developers from leaving homes vacant and generate funds to revitalize abandoned projects.
Public-Private Partnerships (PPPs): Collaborations between the government and private sector can accelerate housing delivery.

Government Efforts and Future Plans

The Federal Ministry of Housing and Urban Development has initiated a Demand-Driven Housing Strategy to prevent unsold and abandoned projects. Recently, the government launched an online housing portal, which has already recorded over 28,000 applications.

Minister Arc. Ahmed Dangiwa highlighted plans to deliver 50,000 housing units, though this figure is far below the annual requirement of 550,000 units. The ministry is also working to establish a National Social Housing Fund (NSHF) to ensure vulnerable groups have access to decent accommodation.

Global Recommendations and Real Estate Investment

Pastor Matthew Ashimolowo, a seasoned real estate investor, stressed the importance of adopting the Sustainable Development Goal 11, which focuses on affordable and sustainable housing for all by 2030. He noted that achieving this goal in Nigeria would require constructing 700,000 units annually for 20 years, with an estimated investment of ₦59 trillion.

Security Concerns in Housing Development

Insecurity poses a significant challenge in some states. Developers in regions like Imo State report kidnappings and other threats, discouraging investors and buyers. Improved rural security and infrastructure, such as better roads, can encourage development outside urban centers.

Conclusion

Nigeria’s housing crisis is a pressing issue that demands coordinated efforts from all stakeholders. By investing in affordable housing, promoting local manufacturing, and leveraging innovative financing solutions, the country can close its housing gap and provide millions with safe, decent homes. The time to act is now.