16 million deficit in Nigeria Housing Market
Analysts at BGL Securities Limited have put the housing deficit in the country at about 16 million.
In a report the analysts also stated that over 50 per cent of 170 million people living in the country are either homeless or without adequate housing.
Nigeria’s real estate sector accounts for 7.6 per cent of the country’s recently rebased Gross Domestic Product (GDP).
In an attempt to reduce the deficit, the federal government had launched the Nigerian Mortgage Refinance Corporation (NMRC) in January this year.
“The lack of the mortgage market has been a long standing issue in Nigeria and even with the introduction of the NMRC, it’s not going to be a magic fix. It’s going to be a gradual process,” the Managing Director of MCO Real Estate, Munachi Okoye told CNBC Africa.
The NMRC’s core aim is to provide affordable mortgages for Nigerians but with the high single digit interest rates, the masses are still sceptical.
“What I think is the number one issue is still affordability. The fact that interest rates are still very high so even when we have access to a mortgage at the lower end of the market, there is still an issue of affordability,” he said.
Addressing the issue of affordability at the launch of the refinance company, the Coordination Minister of the Economy/ Minister of Finance, Dr Ngozi Okonjo-Iweala had assured Nigerians that there would be mass housing schemes for the lower end of the market.
“It’s the lower end where there is a huge demand for housing and where the NMRC ideally would have the most impact in bringing homes to the masses and that is where there is the highest affordability issue,” Okoye argued.
With the elections scheduled for next year, the 14 states where the NMRC would pilot have promised to make land laws less stringent.
“It is in their interest especially as we are entering into an election year, it’s a very strong vote winner to provide housing for the masses and it’s also in their interest as it shows positive action from their part,” Okoye added.