Housing Affordability and the Organized Private Sector Housing in Nigeria

Abstract

Growing housing deficit in Nigeria, particularly in urban areas, has resulted to various housing problems such as overcrowding, homelessness, slum and squatter developments. Despite the myriad of housing policies and programmes to solve the housing deficit, the desire goals have not been achieved, hence the adoption of organized Private Sector housing delivery in 2002. This research is an assessment of the Affordability of Organized Private Sector Housing Delivery in Nigeria. We adopted cross-sectional survey and multi-stage sampling technique. Two states with the prevalence of organized private sector housing developers (OPSHD) in each of the six (6) geo-political zones of Nigeria were selected. Ten Percent (1950) households were randomly selected from the occupied houses (19,500) in all the estates. The structured questionnaires administered on 1950 household heads focused on demographic characteristics (age, sex, and household size) and housing affordability variables (income, housing expenditure and access to mortgage). Questionnaire administered on OPSHD focused on types of houses produced, selling prices and terms. Affordability rating scale (normal ≤ 30%; tolerable 30.1%-50% and stressed > 50%) was used to measure housing affordability. The study revealed that 42.4%; 36.9% and 20.6% of households have normal, tolerable and stressed housing affordability respectively. The implication of these findings is that organized private sector housing is not affordable to most Nigerians, particularly the low and medium income households; and therefore need to be assisted. A more efficient mortgage with better penetration among the low and medium income household is desirable. Also, "rent-and-own" option should be considered to enhance affordability of low and medium income households.

Evaluation of Factors Driving Real Estate Investment Decisions by Private Investors in South – East Nigeria

“…This is also in accordance with Muhammad (2016) who portrays that mortgage repayment, shortage of finance, effect of land use decree, and high cost of building materials are significant constraints to property investment decision. This result is also in line with finding of Okupe (2000) and Gumel (2000), who concluded that the factors that limit the number of property production include high cost of land, accessibility to finance, mortgage repayment, high cost of building materials, Government regulations and bye laws, cost of labour and inadequate facilities, improper distribution of funds and improper management. This further indicates that only investors with privilege and access to finance are in the real estate investment.…”

“…Unfortunately, the private sector is saddled with numerous problems which make supply always fall far short of demand and lower production quality (Nubi, 2008). Okupe (2000) and Gumel (2000), concluded that factors that limit the number of property production include high cost of land, accessibility to finance, mortgage repayment, high cost of building materials, Government regulations and bye laws, cost of labour and inadequate facilities, improper distribution of funds and improper management. In property business investors appreciate transparency of information and trustworthiness in a market.…”

A review of sustainable housing preferences and affordability

“…Housing affordability encompasses a range of factors, including general housing affordability, purchase affordability, mortgage (repayment) affordability, income affordability, and rental affordability. Affordability is typically determined by examining the relationship between housing expenditure and household income, with a common threshold set between 25% and 30% of household income [32], [33]. Another approach, the residual income approach, considers whether a household's income, after deducting standard housing expenses, is sufficient to meet the minimum acceptable nonhousing expenses [33].…”

“…Affordability is typically determined by examining the relationship between housing expenditure and household income, with a common threshold set between 25% and 30% of household income [32], [33]. Another approach, the residual income approach, considers whether a household's income, after deducting standard housing expenses, is sufficient to meet the minimum acceptable nonhousing expenses [33]. Housing affordability has many components and some are presented in Figure 1 [34].…”

Exploring the Dynamics of Housing Demand Preferences in Ilorin, Nigeria

“…Affordable housing has economic and welfare effects on the development of a society. He postulated that economically, housing contributes mainly to the fixed capital formation, employment, and substantial backward and forward linkages with the rest of the economy [5,6]. Housing demand is described as the ability or willfulness of the consumer to pay for a particular place of habitation depending upon such consumer's income based on affordability, the house style, location preferences, and amenities.…”