Nigeria’s housing market faces major affordability challenges. However, experts believe strategic approaches can help individuals achieve homeownership.
Chudi Ubosi, principal partner at Ubosi Eleh & Co, recommends a gradual, step-by-step approach to owning a home. Speaking on BusinessDay TV (BDTV), he advised collaborating with others to buy property. After the value appreciates, sell and reinvest in another property. Repeating this process allows prospective homeowners to build enough capital to eventually construct their own homes.
Rent-to-Own Schemes Offer Another Path
Ubosi also highlighted rent-to-own schemes. These schemes let tenants pay rent until they cover the property’s total value. Once fully paid, the home becomes theirs. This approach allows individuals to become landlords after completing their payments.
Challenges in Nigeria’s Mortgage System
However, Ubosi criticised Nigeria’s mortgage system. Unlike in other countries, Nigerian mortgage loans have shorter terms and higher interest rates. Globally, mortgage loans typically span 20–30 years with single-digit interest rates. In Nigeria, loan terms rarely exceed five years and often come with double-digit interest rates. This makes homeownership harder for many citizens.
Call for Government Action
Ubosi urged the government to improve the investment climate. He recommended deepening financial instruments and improving access to affordable loans. Creating a stable economy would also encourage private sector participation in housing development.
These reforms are critical. The World Bank projects that, by 2025, 1.6 billion people worldwide will face housing shortages.
Rising Costs and Affordability Concerns
Over the past decade, Nigeria’s housing crisis has worsened. Inflation, rapid urbanisation, and rising labour and material costs have driven home prices beyond many people’s reach.
A 2022 World Economic Forum report revealed housing costs have grown faster than incomes globally. The report studied 200 cities and found 90 percent were unaffordable. In most cases, average home prices were more than three times the average income.
A Global Housing Crisis
This crisis isn’t unique to Nigeria. In the United States, Moody’s Analytics reports a shortage of 1.5 million homes. The study notes that the U.S. has fewer homes for sale or rent than at any point in the last 30 years.
These global trends highlight the urgent need for Nigeria to adopt effective housing policies. Such policies would make affordable, sustainable housing accessible to more citizens.
