FMBN, labour plan 2,800-unit housing scheme

The Federal Mortgage Bank of Nigeria (FMBN) and leading labour unions have agreed to begin the implementation of a national affordable housing programme for workers.
FMBN is kick-starting the scheme in two states and Abuja, in conjunction with the Nigeria Labour Congress (NLC), Trade Union Congress (TUC) and the Nigeria Employers’ Consultative Association (NECA).

The project will start next month with the launch of the 100-unit housing estate for Voice of Nigeria (VoN) in the Federal Capital Territory (FCT).
After the Abuja launch, Yola (Adamawa State) and Umuahia (Abia State) will follow suit.

The pilot phase of the programme aims to deliver 2,800 housing units in 14 sites across the country. This includes 200 houses in each of the six zones in addition to Lagos and Abuja.

The housing scheme is a product of strategic collaboration between FMBN and the country’s leading labour unions towards addressing, in a structured and sustainable manner, the housing requirement of workers currently estimated at about 3,750,000 housing units.

It is expected to provide safe, decent, quality and affordable housing to registered members of NLC, TUC and NECA that contribute to the National Housing Fund (NHF) managed by FMBN.
Planned house types therefore include semi-detached bungalows and blocks of one bedroom, two bedrooms, and three bedrooms.

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FMBN’s Group Head, Corporate Communications, Mrs. Zubaida Umar, said the designs of the houses were based on tested local and international social housing models.

“To ensure successful execution of the programme, the design and implementation plan was based on extensive deliberations and recommendation of housing experts.”

In a related development, the Lagos State government has promised to provide robust business environment for private developers to partner authorities in reshaping the city and accommodate all classes of people.

Commissioner for Housing, Prince Gbolahan Lawal, stated this yesterday in Lagos at the 2018 African Real Estate Conference and Awards with the theme ‘Growing African Cities: The Reshaping Model’ organised by, a member of ToLet Property Group.

According to him, the greatest challenge in housing is how to reduce deficit, stressing that government has set a target of 20,000 new housing units by the year 2020 as part of its multi-faceted approach to confront the three million shortfall.

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He said: “Lagos State government is ready for private partners who are set to work with us. Our task is to ensure that enabling environment is possible. For affordable housing, our contribution as government is to make sure that you have land, provided you have the financial and technical ability to develop it. We will also ensure that you have land titles.”

Chinedum Uwaegbulam

Housing as means to an end: The family homes fund is set to bridge the gap

Through the combined effort of various market players including Government Ministries, its Agencies and the private sector determined efforts are being made to address acute need for affordable housing in Nigeria. The challenge is a daunting one. But there are significant reasons for optimism that new partnerships and initiatives supported by the Federal and State Governments will help provide the over 17million new homes we need over the next 15 years.

The Family Homes Fund Limited is one of such new initiatives. The Fund is a partnership between the Federal Ministry of Finance and the Nigerian Sovereign Investment Authority as founding shareholders.

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The Fund will be the largest affordable housing focused fund in Sub-Sahara Africa leveraging its significant capital (in excess of N1trn by 2023) to facilitate access to affordable housing for millions of Nigerians on low to medium income. Through strategic partnerships with various players in the sector and some of the world’s main Development Finance Institutions it has an ambitious commitment to facilitate at supply of 500,000 homes by 2023

However, leveraging its capital to support the supply of new homes for families on low to medium income is only a means to an end. The key priority for the Fund is totake advantage of the opportunity a large-scale house building programme offers to create jobs. Jobs which are sustainable and offer families security, improved quality of life and hope.

Housing, Jobs and Economic Development

With a projected cumulative spend of up to N1trillion by 2023 into various inputs into the housebuilding process including doors, windows, tiles, roofing materials, blocks, paving stones, paint etc. there is opportunity to incubate large numbers of SME small scale industries creating significant employment.

The Family Homes Fund aims to catalyse the creation of new jobs through the investments we make. Alongside investment by other players in the housing sector we have a real opportunity to achieve impact. Real positive impact on families, women who often carry the biggest burden in poor households and young people. At a national level, this potential effectively harnessed could generate up to 1.5% increase to the GDP by 2023.

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How will we make this happen? The Family Homes Fund Ltd.’s approach to creating jobs will be driven by 3 priorities:

Policy: The Fund aims to support ongoing dialogue around development of a local contents framework for inputs into the housebuilding process. A long-term objective is to ensure that up to 80% of manufactured inputs are locally produced.

Partnerships:  We can achieve much more collectively, than any single player can individually. The Fund aims to build strong partnerships with a broad church of institutions and agencies to maximize this opportunity. We will work with existing and new partners in the Building Materials Industry offering where appropriate guaranteed purchase commitments thus enabling critical access to capital for investment in new.


People:  Through the Investments we make, The Fund will equip a new generation of young Nigerians with high-level skills in modern methods of construction and technologies.

Through a combination of these activities, the Family Homes Fund aims to create or support up to 1,500,000 jobs by 2023 making a real difference to the quality of life of their families and the economy.

The Cable

What Lagos ranking as 3rd worst city to live in means to local property market

A report by the National Bureau of Statistics (NBS) says that 65 percent of all real estate activities in Nigeria happen in the three big cities of the country namely, Abuja, Lagos and Port Harcourt. 37 percent of these activities take place in Lagos alone.

Abuja and Port Harcourt account for 22 percent and 6 percent respectively. The high percentage of activities in Lagos is understandable because this is the country’s real estate hub where land value is so high that it constitutes a large chunk of the state government’s internationally generated revenue (IGR).

The state has a burgeoning real estate market. But this market is presently under serious threat by the action and inaction of the state government which seems unbothered by the negative impact of the state’s difficult and challenging environment on people sand business.

Recently, the World Economic Forum (WEF) said Lagos, which is Nigeria’s commercial capital, is the third worst  city in the world to live in, explaining that out of 140 cities of the world surveyed for livability, Lagos was ranked 137th.

Unconfirmed reports have it that  the parameters considered included ease of doing business, security, infrastructure, health, education, transportation, etc. and after considering all these, WEF concluded that Lagos was like a city under war.

This has far-reaching implications for the state’s property market. Both domestic and foreign investors will be looking at Lagos with a third eye in their investment considerations and decisions. “If it is not easy to do business here, what would you like anybody to come and do?

“Except the return on investment is so high that it is irresistible, then high risk takers will come in and what they will do is just to hit it and go back, meaning that whatever is their attraction is not sustainable and ”, said Gbenga Onabanjo, an environmental activist and consultant.

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Living and doing business in Lagos is extremely difficult and casual visitors wonder aloud how the residents survive the stress and strain imposed on them by terrible and, most times, life-threatening traffic gridlock, suffocating congestion, domestic and industrial waste littering roads and streets, etc.

Another major challenge to business in the state is the state of roads infrastructure which has kept the city, which prides itself as a mega city, permanently on slow motion as against a truly mega city that is fast-paced with both people and commerce on fast lane.

As a commercial city and particularly a real estate destination, Lagos needs an environment that is enabling for investors to come in and invest. It needs good infrastructure and adequate security. But all these are lacking, meaning that not many new investors will consider the state for investment.

Not too long ago, Lagos was selected as one of the 100 resilient cities in the world by the Rockefeller Foundation. 100RC President, Michael Berkowitz, explained that Lagos was selected because of its leaders’ commitment to resilience-building and the innovative and proactive way they have been thinking about the challenges the city faces.

 “For us, a resilient city has good emergency response and meets its citizens’ needs,” Berkowitz continued, adding,  “it has diverse economies and takes care of both its built and natural infrastructure. It has effective leadership, empowered stakeholders, and an integrated planning system. All of those things are essential for a resilient city.”

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Lagos governor, Akinwunmi Ambode, hailed this selection, assuring that the state’s entrance into the 100RC Network will help it  fight the resilience challenges of urban planning, transport gridlock, environment, public health and modern infrastructure.

But it remains to be seen what the state is doing in this direction.  Everything seems to have ended with the euphoria that greeted the selection and the announcement. “Though I am not conversant with the parameters for selecting Lagos a resilient city, I think that for Lagos to be a resilient city, given the way the state is constituted, a lot still needs to be done because everything seems to be disorganized”, said an analyst who did not want to be named.

“The city is over-crowded and there is need for decentralization and decongestion of the city centre. The rural-urban migration to Lagos is so high that government needs to stem the tide and the way to do it is by the state government to start to help the neighbouring states set up cottage industries so that people can as well stay there and find job opportunities”, he analyst advised.


Sterling Bank Ahead In Combating National Housing Deficit

Sterling Bank Plc has adopted unique strategies to increase the nation’s housing stock.  

The huge deficit level in Nigeria’s housing sector is worrisome. As at 2012, experts estimated the deficit to be at a minimum of 17 million units and recently raised an alarm that the figure could be up to 25 million units if a proper investigation of the state of affairs in the sector is undertaken. Worse still, experts say the majority of Nigerians live in blighted areas that are unfit for human habitation.

Affirming this, Minister of Power, Works and Housing, Mr. Babatunde Fashola, disclosed that Nigeria has been contending with a huge deficit in the housing sector over the years. He decried the current situation which effectively enables only one percent of the Nigerian population access mortgage facilities, saying it is extremely low relative to a country like the United Kingdom with 77 percent.

Fashola expressed concern that the deficit is apparent both on the supply and demand sides. According to him, it is not just that the housing situation is grossly inadequate to satisfy the needs of the population, access to mortgage is also inadequate. The minister noted that financial institutions have allocated barely one percent of their loan portfolios to housing and about 11 percent to construction in the last 30 years.

Against this backdrop, it is commendable that Sterling Bank Plc is partnering with real estate development firms to reduce the country’s housing deficit. The bank’s housing sector interventions are being executed by its Commercial, Institutional and Non-Interest Banking Groups through partial and full financing of viable real estate development projects across the country.

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At the 2018 City People Real Estate Awards, Sterling Bank Plc was named the most Real Estate Friendly bank of the year for the significant role it is playing in the housing sector. The innovative model the bank has adopted to cater to the demand and supply sides is noteworthy. As a member of the Nigerian Mortgage Refinance Company (NMRC), Sterling Bank has been able to mobilize funds for home-finance/mortgage refinancing.

While receiving the award, Basheer Oshodi, Phd, Group Head, Non-Interest Banking, Sterling Bank Plc revealed that the bank has committed significant resources to the real estate development sector to ameliorate the impact of the huge national housing deficit on citizens across different socioeconomic classes. According to Mr. Oshodi, judging from the impact the bank has made in retail real estate financing, it is ready to provide credit to real estate developers who adopt prudent project selection and management models.

Some of the housing estates include the part-financing of Crown Court Mabushi in Abuja for Crown Realities Plc. The project comprises 72 units of 3-bedroom flats, 18 units of 4-bedroom semi–detached houses and 16 units of detached 4-bedroom houses.

Prior to this, Sterling Bank had part-financed the prestigious Crown Estate in Lekki, located on a 41.7 hectares gated private estate along the LagosEpe Expressway in 2000.

Other residential projects part–financed by Sterling Bank in collaboration with developers include Diamond Estate, Amuwo Odofin, Lagos; 360 low-cost housing units for Diya Fatimilehin & Co., Friends’ Colony Estate, Lekki Lagos; a 210 semi–detached and detached housing units for Aircom Nigeria Limited, Common Wealth Court, Lekki; 36 apartments of Defacto Properties Limited and Bourdillon Court Estate, Lekki, Lagos comprising 192 housing units (flats and Terrace houses) for Aircom Nigeria Limited.

Others are Cromwell Court’s 180 units of apartments; Milverton Estate’s 240 units of apartments, Northern Foreshore Estate’s 566 mixed housing units; Napier Garden’s 220 mixed housing units, all for Aircom Nigeria Limited in Lekki, Lagos and Tarino Towers’s 29 units of apartments for FMT Parkview Limited located in Ikoyi, Lagos.

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Sterling Bank also partfinanced Visage Apartment’s Victoria Island Lagos, 40 units of apartments for Sat Leasing Limited on Victoria Island, Lagos; Primewaterview Gardens’s, phases I & II 539 units of apartments for Primewaterview Ltd in Lekki Lagos; Eko Court, Parkview Estate’s,12 units of apartments for Samtl Properties Ltd in Ikoyi, Lagos; Happy Haven’s Banana Island’s 16 units of apartments for Samtl Properties Ltd in Ikoyi, Lagos; Doby Haven’s 20 units of apartments for Eco Building Ltd in Lekki, Lagos and Pearly Gate Estate’s 40 mixed housing units for Edward Properties Konsult.

The bank has also wholly financed another residential estate for Crown Court in Durumi, Abuja which was inaugurated recently by the Minister of the FCT, Mr. Mohammed Bello.

Managing Director and Chief Executive, Crown Realties Plc, Mr. Darl Uzu, commended Sterling Bank for stepping in to provide critical financing for development projects in the country, particularly in a period of recession. Uzu said the financial institution has proven to be a dependable partner in times of need for Crown Realities Plc.

“At the height of the recession when funds were scarce and investors’ confidence was at its lowest, Sterling Bank stood by us and extended credit to finance our operations,” he said, adding that Crown Realties will not disappoint the bank and will do everything possible to further strengthen the confidence reposed in the company. “We’ll always do our part every time.”

Extending its successful Public Private Partnership model into the real estate development sector, the bank financed Sterling Court Housing Estate in collaboration with Lagos State Government through Agboyi-Ketu Local Council Development Area.

Conceptualised by the concessionaires in 2009, Sterling Court is located within Ajelogo Housing Scheme in Alapere, Lagos. It consists of contemporary apartment building designs, ultra-modern terraces and duplexes which meets housing needs of middle class families. The housing project covers the construction of 40 blocks of 320 housing units, commencing with 26 blocks of 116 housing units in the first phase in 2017.

Bennett Oghifo

60M People in Nigeria Live Without Adequate Access to Water

 Over 120m lack decent toilet

Statistics reeled out recently by WaterAid Nigeria shows that 33 per cent (about 60 million) of people in Nigeria are currently living without adequate access to water; 67% (over 120 million people) do not have a decent toilet; and 26% (about 47 million people) practice open defecation.

WaterAid, which has an office in Nigeria, is a global organisation with branches across the world. It enables the world’s poorest people to gain access to safe water, sanitation and hygiene education. The organisation believes that these basic human rights underpin health, education and livelihoods and form the first, essential step in overcoming poverty.

Presenting the water and sanitation situation in Nigeria, the Country Director, WaterAid Nigeria, Dr. ChiChi AniagoluOkoye said, “Nigeria is at the precipice of a water, sanitation and hygiene catastrophe. Despite the progress achieved between 1990 and 2015 for access rates to improved water sources, Nigeria has regressed with regard to access to piped water service. Access to piped water on premises in urban areas dropped from three in every 10 persons in 1990, to even less than one in 2015.”

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The country director of WaterAid Nigeria stated this in her presentation at a workshop in Nairobi, Kenya, organised by the Media for Environment, Science, Health and Agriculture (MESHA), an association of writers, journalists and communicators who specialise in reporting science for development; the Centre for Science and Environment (CSE), a leading research and advocacy think tank based in New Delhi, India; and the Kenya Network for Water and Sanitation. The workshop for journalists in Africa discussed, among other things, how to improve coverage of water and sanitation in the African media.

ChiChi Aniagolu-Okoye said a major intervention was the federal government’s “declaration of a state of emergency in water and sanitation. In addition to declaring a state of emergency, the Federal government has also enacted enabling policies and programmes in the last three years towards achieving the goal of SDG 6.”

Other interventions are the Development of the Partnership for expanded WASH (PEWASH) policy 2016-2030. The PEWASH articulates the government’s plans to reach 100% coverage for WASH services in rural areas. The document sets out a framework for coordination and investment among key sector stakeholders and across the three tiers of government, according to her.

There is also the development of a National WASH Action Plan that sets out a 13-year strategy, including an 18-month emergency phase. It includes the establishment of a National WASH Fund for increased financial investment for WASH.

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She said Nigeria has a national sanitation roadmap 2025 which provides a guide towards achieving an open defecation-free country; a Water Bill for the proper regulation of water provision and use in the country. The bill has passed the 3rd reading at the National Assembly; improved coordination of sector actors through the National Task Group on Sanitation, revitalisation of the task group on water quality, setting up the inter-ministerial committee on sanitation to facilitate high level engagements between relevant ministries, improved engagement with development partners, development of draft national monitoring framework (National WASH Information System (NAWIS) WASH information Management System (WASHIMS).

She said despite these laudable steps, a lot still needed to be done to ensure that Nigeria meets SDG 6 Goals by 2030, saying there was need for strong political will that would ensure “improved funding for the section, including plugging leakages to ensure the funds that do come to the sector are properly utilised; better coordination of stakeholders -government, donors, CSOs; an effective monitoring system that includes a high level task force chaired by the minister and includes government, bureaucrats, CSOs, the religious, traditional rulers, representatives of women, girls and people living with disabilities groups which meets monthly basis to track progress.

Others are improved private sector involvement; Hygiene Behaviour Change programme that works and is sustainable.

WaterAid, she said “is throwing its weight behind this audacious step of the federal government to support the realisation of the expected goals of SDG 6.”

Bennett Oghifo

Big City Housing Doesn’t Have to Be So Expensive

Bringing down prices requires a combination of affordable homes and upzoning.

The one-story house for sale on Oak Court in Menlo Park, Calif., is 88 years old and 830 square feet, with two bedrooms, one bathroom, a detached one-car garage, and no air conditioning. Almost anywhere else it would be the startiest of starter homes. But because it’s in Silicon Valley, where the supply of housing is far short of the demand, the bungalow was listed in mid-August for $1.575 million.

Imagine if ants put up barriers that stopped other ants in their colony from getting to a sugar cube. That’s what Americans are doing to one another by making housing impossibly expensive in the very places, such as Silicon Valley, that most need fresh talent.

Housing prices needn’t be high just because an area is hemmed in by water or mountains, as Silicon Valley is at the end of San Francisco Bay. After all, you can always build upward without wiping out green spaces and historical treasures. Rather, high housing prices are the outcome of a strategy by incumbent homeowners to keep a lid on construction. Keeping cities frozen in time, only more expensive, is great for homeowners and bad for just about everyone else, including local employers and the people who would come to work for them but can’t. While the problem is most pronounced in Silicon Valley, it exists in San Francisco, London, New York, Tel Aviv, Tokyo—name your global hot spot.

Affordability matters because cities have never been economically more important. Biotech companies choose to cram together in San Diego and Cambridge, Mass.; cybersecurity firms are cheek by jowl in Israel’s Silicon Wadi; consumer-electronics companies want to be near one another in the former fishing village of Shenzhen, China.

Constraints on housing prevent people from joining, and contributing to, clusters of innovation. A new paper by economists Chang-Tai Hsieh of the University of Chicago Booth School of Business and Enrico Moretti of the University of California at Berkeley found that restrictive zoning in Silicon Valley, San Francisco, and New York “lowered aggregate U.S. growth by 36 percent from 1964 to 2009.”

Thirty-six percent is kind of a big number. Says Hsieh: “If you compare it to all the things our political system talks about, this is just huge relative to everything else.”

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The good news is that cities don’t have to be prohibitively expensive. The trick is to form a broad coalition for what pro-housing activists call Yimby (yes in my backyard) by ensuring that the benefits will be enjoyed by all, or almost all. More housing can help wealthy landlords, who benefit from the right to put more housing units on a given block, as well as low- and moderate-income families, whose rents come down when the supply of rental housing goes up.

To be clear, not every city with a housing shortage is economically thriving. Delhi, Jakarta, Lagos, Manila, and other megacities have different issues to deal with, including an influx of desperate people from rural poverty. We’re talking about First World problems here: how to cope with the complications of prosperity.

One recent success story is Mountain View, Calif., the home of Google parent Alphabet Inc. In December the City Council approved a plan for the area around the Googleplex that allows for construction of almost 10,000 homes, up from zero in the original proposals. Leonard Siegel, who was vice mayor then and is mayor now, says the city is locating homes near office space rather than trying to jam them into older neighborhoods. “Many people are perfectly happy for us to build housing near Google, because it’s not in their backyard,” he says.

Mountain View officials insisted that developers make 15 percent of the homes affordable, and they’re charging them fees to cover the cost of new public infrastructure such as transportation and sewer lines. “The way I told one developer, ‘We’ll find out if we piled on too much,’ ” Siegel says. “ ‘I want to load your back with straw, and when it starts to break, pull one straw off.’ They said, ‘I understand.’ ”

Some market purists argue that building affordable housing is unnecessary. Filtering theory says that even the construction of luxury housing will ultimately benefit the poor because the rich will move into the new units, freeing up their old dwellings, which will be occupied by the middle class, who in turn will make their old homes available to the poor.

Filtering really is a thing, and it works in the aggregate. But in any given neighborhood, lower-income renters are right to fear that gentrification will price them out of their home. So they oppose new construction, which only exacerbates the citywide shortage. Case in point: A California Senate bill to allow for denser construction along transportation corridors, backed by the Yimby movement, failed earlier this year over concerns about displacement of the poor.

That’s why making sure everyone benefits is essential. Rent control is anathema to most economists, but if applied only to existing housing, not new units, it can tamp down political opposition to fresh development without discouraging construction. Another effective approach is inclusionary zoning, which guarantees that a certain share of development will be affordable. The trick is not to lay so many requirements on developers that they back out and nothing gets built; not every mayor can afford to be as demanding as Mountain View’s.

Finally, outright construction of public housing can make sense. Does that sound socialist? Consider that more than 80 percent of residents in Singapore, the free-market city-state, live in government-built housing. This year the World Bank praised the food courts in Singaporean housing, known as hawker centers, “where all income classes and ethnicities meet, socialize, play, and dine together.” At least two hawker centers, it said, have a Michelin star.

U.S. Department of Housing and Urban Development Secretary Ben Carson has one good idea: to use the lure of HUD dollars to get cities to ease zoning rules and permit more construction. But Carson hasn’t earned the support of advocates for low-income housing because he also wants to scale back an Obama-era rule requiring cities to work toward desegregation, which he once decried as “social engineering.”

Ydanis Rodriguez, 53, can identify with both sides of the Nimby struggle. He was born and raised in the Dominican Republic and moved as a teenager to Inwood, a neighborhood at the northern tip of Manhattan. He became a leader of 2011’s Occupy Wall Street movement. Now a New York City councilman, Rodriguez is a fierce advocate for his low-income constituents, many of whom are fellow Dominicans. When the city announced a plan to upzone Inwood, allowing for taller buildings and more market-rate housing, many of his constituents opposed it, fearing that gentrification would force them out. Rodriguez, controversially, came out in favor of the plan. He argued that it would keep low-income people in Inwood by constructing thousands of units of subsidized housing in addition to market-rate buildings.

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“It hurt,” Rodriguez says of the accusations that he was selling out his own people. But when the upzoning passed the City Council on Aug. 8, he says, “I went to sleep in peace that night.”

The upzoning of New York under a succession of mayors, including Michael Bloomberg (founder and majority owner of Bloomberg LP, which owns Bloomberg Businessweek) and Bill de Blasio, is evi­dence that a big city can burst the bonds that limit growth. For more evidence, see La Défense in Paris, Canary Wharf in London, Pudong in Shanghai. Growth can be messy, but it’s better than stasis, which pretty much assures that supercities will fall short of their potential. “Arguably,” Harvard economist Edward Glaeser wrote in a Brookings Institution paper last year, “land use controls have a more widespread impact on the lives of ordinary Americans than any other regulation.” The most important policy for cities is to let them grow.

Peter Coy

Where to find good value, high returns on real estate investment

Whatever the economic cycle, real estate sector remains an investment destination where investors will always get value and relatively high returns on investment, especially if the investment is done in the right place at the right price and for the right reason.

Bonds, treasury bills, equities, mutual funds, etc are all good investment asset class but cannot compare favourably with real estate in terms of reliability, flexibility of use and potential for value appreciation over time.

A good number of people think, erroneously, that real estate investment is for the ‘big boys’ but investment experts disagree,  stressing that investment in real estate takes into consideration the 5Ws consisting of who, what, when, where, why (and how).

As for who should invest in real estate, the experts say just “anybody” irrespective of age or gender can invest in real estate. Anybody, no matter how young, could investment and this includes women. At a real estate conference in Abuja recently, participants canvassed women empowerment to enable them invest in real estate, believing that it is one of the surest ways of protecting the future.

Bricks and mortar are more stable than stocks or bonds; they have long term growth with income return and this is why people should invest in real estate. The wide housing demand-supply gap offers   investment opportunity which value is well over $363billion. The deficit is said to be increasing by 2 million houses per year at the current population growth of 2.6 percent per year.

Though it is important to know that the time to invest is now, what matters most in all real estate investment considerations is where to invest and get not just great value, but also good returns.

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Good yield on any investment is very important because it compensates for the investor’s time, efforts and the sacrifice in terms of forgone alternatives to the investment. This is why where to invest and get good yield is critical.

A couple of years ago, the National Bureau of Statistics (NBS), noted that Lagos State recorded the highest amount of real estate activities at 37 percent  followed by Abuja at 22 percent and Rivers state at 6 percent,  covering 65 percent of all real estate activities in Nigeria.

That statistics has not changed, meaning that Lagos remains a compelling destination for real estate investment. This is quite understandable.  Lagos is Nigeria’s commercial nerve centre. It has over 20 million people, meaning that the city is a large real estate market. This island city has over three million housing deficit; about 80 percent of its population lives in rented accommodation which means that homeownership level is very low, thus presenting huge investment opportunity in residential real estate.

The Lagos real estate market is distinctively segmented into low, middle and high end. Demand is very weak at the low end market because this is where low income earners look for housing.  At the mid-end market, demand is relatively strong, but much stronger at the high end market.

Ikoyi, Victoria Island and Lekki, the three island locations in the state, constitute the core of high end submarkets in Lagos. Though property, land or built up, are very expensive in these locations, analysts say they offer real value and good returns to investors.

But to invest wisely and profitably in these locations, experts advise that in-depth analysis of each location’s strengths, weaknesses, opportunities and threats (SWOT) should be done.  First and foremost, potential investors have to understand that  “real estate investment is not a get- rich quick scheme;  understand your investment parameters;  be thorough in assessing opportunities; seek professional advice; do due diligence, and if the deal is not right, walk away”, Udo Okonjo, CEO, Fine and Country, advises.

As an investment destination, Ikoyi’s strength is in its excellent location,  ease of obtaining approvals for development,  high rents and return on investments (ROI) based on demand to be in a serene environment;  internationally recognized and accepted location increases value perception, and offers highest office rents in Nigeria and second highest in Africa.

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The weakness of this location is in its high cost of land and approvals, building would be restricted to high rise apartments to maximise land; there is need for an attractive design and layout of the project based on competing developments within the axis.

Opportunities in Ikoyi as an investment desitnation include ease of rental as there is a large pool of prospective home buyers, both local and  Nigerians in Diaspora would rather buy out right a finished product that meets their immediate needs in Ikoyi; amendment in Lagos planning legislation is expected to make zoning for commercial use easier.

But there are threats too. These come in as construction challenges leading to delayed delivery; lack of financing for projects or mortgages for prospective buyers; presence of competing developments within the same axis and planning challenges to secure permission for commercial office use.

The strengths of  Victoria Island are its excellent location, ease of obtaining approvals for development based on precedent, high rents and return on investments (ROI) based on demand, and a wide mix of support service companies.

The weaknesses include poor parking,  traffic congestion, lack of supporting infrastructure,  high cost of land and approvals, building would be restricted to high rise apartment to enable maximisation of land, and available land for residential development within this axis is extremely small

The opportunities in this location include lack of good quality residential and commercial space and demand for this is high; there is also opportunity for corporate entities and individuals to own properties close to their offices.

But the development of the Eko Atlantic in the long term is a major threat to the continued prosperity of Victoria Island. So, potential investors should always bear in mind that this development, which is already evolving with some residential and office developments coming up fast, may throw spanner in the works.




The Nigerian housing sector has an affordability challenge. Housing delivery is targeted mainly at the middle high income segment of the population that can either pay cash or access mortgage finance from the banks.

The sheer size of the low income population, however, suggests a crucial growth opportunity for developers and financiers if they are sufficiently innovative. The affordability parameters inherent in the mortgage instrument limit access by the low income population.

These parameters include 20% – 30% equity contribution, maximum tenures of only 10 –15 years, high interest rate of 22%, etc. Opportunities to address this market are limited by expensive building materials and the lack of local capacity to produce the supply chain components like doors, door knobs, windows, etc. The non – availability of long term funding for housing development also compels builders of residential accommodation to recover their capital within the shortest possible time. It is in this area that the development of non-mortgage housing finance products, such as housing microfinance, could be very usefully explored. Some of the other challenges to the development of the Nigerian housing market include:


Inflation: Inflation in Nigeria is still in double digits. Investors, lenders and borrowers prefer a stable economy where decisions can be taken without trepidation. Apart from inflation, other macroeconomic indices should be kept stable and must continue to improve if the mortgage market is to thrive and become vibrant.

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Land Use Act:  The Land Use Act of 1978 has become an obstacle to making land available for housing. The Act has been blamed for the prolonged bureaucratic process of obtaining the Certificate of Occupancy, the document that confers ownership of the land to the individual from the government. Furthermore, the Act has not guaranteed security of title and cost remains prohibitive while access to titled and registered land is difficult and cumbersome.

Taxes, Stamp Duties and Fees: The tax burden on housing development in Nigeria is enormous. Value Added Tax (VAT), which is collectible at various levels of the building process, adds as much as 30% to the total cost of a house. This is exclusive of titling fees and stamp duties. This ultimately puts the sales price of the unit beyond the reach of low income earners.

Property Registration: Registering property is generally slow and expensive. However, there has been some improvement since 2008 when the World Bank’s Doing Business 2008 report recorded that reforms had led to a reduction in the time required to complete the process from 274 to 80 days. In the 2010 World Bank Doing Business sub-national report, the number of days for processing the governor’s consent was estimated to be 52 days. However, it takes only 1 day for the same registration to be done in Singapore.


Insufficient Capital Base: The inadequate capital base of most primary lenders limits their ability to provide needed finance to meet market demand.

Funding Challenges: Funding is a major challenge in the Nigerian housing market. The market is characterized by high interest rates, which are a reflection of the source of funds which is predominantly short tenured (30 days, 60 days and 90 days) Mortgage finance where present is structured as variable rate mortgages. Funding challenges lead to affordability issues. Thus, there is a gap between the cost of houses and the income of end users.

Unavailability of Secondary Market: There is no efficient secondary mortgage market linked to capital markets and institutional investors. This puts enormous burden on PMIs or housing finance institutions to carry the mortgage loans to maturity. Currently, outstanding mortgage loans remain on the books of the PMIs no matter the tenure. This limits the ability of the PMI to originate more loans.

Lack of Credit Enhancement Vehicles: To extend mortgages to low-income levels, there needs to be some credit enhancement like mortgage insurance to guarantee credit risks up to certain loss levels for loans with high loan to value ratios. This may also extend affordability to the low income population as lenders will require smaller deposits if the loan is guaranteed.

Skilled Manpower: There is limited capacity for the requisite skills required in the mortgage market in Nigeria. This is explained by the fact that the market has not being in existence for a long time.

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High cost of building materials: Nigeria imports about 60% of the building materials required for housing development. This is a key factor for the high cost of houses.

Infrastructure: Infrastructure accounts for about 25 to 30 percent of housing costs. It is a major determinant in the delivery of affordable housing. Government has neglected this area and developers now provide same, thus increasing the cost of houses. This is evident in many gated residential estates across the country, where the developer provides independent/alternative electricity, water treatment plant, sewage plants, access roads to the estate, etc.


…to be continued

Affordable housing: private initiative to the rescue

With growing population, a lingering housing deficit and government’s continued inability to provide affordable housing in practical sense, a multinational has seized the initiative to provide technical support, materials, and connect  mortgage providers with prospective house owners, among  others. MUYIWA LUCAS reports that the initiative is part of the firm’s global plan, which will benefit 25 million households, with Nigeria benefitting substantially.

It is not a new piece of information that Nigeria’s population is increasing geometrically. But several studies conducted by the United Nations on Nigeria’s population showed that come 2050, there will be 400 million people in Nigeria, is frightening. This projection means that the country would have overtaken the United States (US) in another 32 years from now, as the 3rd most populous country in the world.

In similar vein, the World Bank projected that Nigeria’s population is growing at 2.8 per cent rate yearly, while her per urban population grows at 4.7 per cent as a result of the rise in rural-urban migration. This growth rate is, however, disproportional with staggered attempts at bridging the housing deficit by both the public and private sector in the country.

To experts and other stakeholders in the real estate and construction industry, these studies represent a timely warning for the country’s built environment, especially with regards to providing affordable housing in a country where a deficit of 17 million housing exists. This fear may not be unfounded given that population explosion comes with an attendant need for housing. Stakeholders and policy makers have put Nigeria’s financial requirement to tackle the deficit at N59.5 trillion.

A 2010 report commissioned by EFInA and Finmark Trust, titled: “Overview of Housing Finance Sector in Nigeria”, submitted that 85 per cent of the urban population live in rented accommodation, spending more than 40 per cent of their income on rent. Of these rented houses, 90 per cent are built through self financing by the owner, mainly due to lack of mortgage financing while less than five per cent of these houses have formal title registration.

The lack of an efficient and effective mortgage financing has remained a huge albatross on the country, irrespective of the various government efforts in this direction. This is why only a tenth of the one million homes built yearly, has helped to tackle the deficit over a period of 10 years. Most of these, findings revealed, are by persons who contend with deficient financing, shoddy workmanship and poor building materials, among others.

The low income category seem to be the most hit in Nigeria’s housing debacle. For a Nigerian aspiring to build an affordable home with about N3 million, there are enough challenges to induce headaches, which either frustrate the ambition or force the project to be abandoned. These include access to finance, which is the major source of worry; others are delays in project completion, taking between two to five years; lack of access to qualified building professionals without cut-throat charges as professional fee; mortgages focusing on the high end market; inconsistent quality of building materials; bureaucratic building approval process and the high cost of acquiring land and its tenure issues.

A former Minister of Lands, Housing and Urban Development, Mrs. Akon Eyakenyi, acknowledged that affordable housing delivery for the low and middle income earners cannot be achieved without the provision of incentives to encourage private sector participation.

“To build a house in Nigeria is a very expensive task due to the high cost of building materials. Affordable housing cannot, therefore, be achieved without a drastic reduction in the cost of housing construction and other associated costs, which invariably determine the selling price. Consequently, for affordability to thrive, emphasis must shift to reducing the cost of housing construction to promote access to affordable homes to the vulnerable segment of our national population,” Mrs Eyakenyihad said at a pre-summit meeting on the Nigeria housing and construction summit/expo, in 2014.

She then called on the organised private sector, manufacturing outfits, finance houses and multilateral agencies to support the drive for affordable housing delivery.

Eyakenyi’s call has not fallen on deaf ears, as the private sector has taken up the challenge of housing in the country. This has again made for a silver lining to appear on the horizon for Nigerians desirous of owning their affordable houses.

For instance, Lafarge Africa has put in place an initiative, which it calls “Easy Home”, an innovative affordable housing initiative, which is already providing innovative solutions for the construction, renovation and extension of houses. The scheme is tailored to the local challenges and needs of individual home builders, including Nigerians, who already own their land and want to build. Through the initiative, LafargeHolcim Group, hopes to impact about 25 million people by 2020 and Nigeria is expected to benefit from a significant chunk of the scheme.

Lafarge Africa Head of Affordable Housing initiative, Mr. Aurelien Boyer, explained that if the associated challenges to affordable house ownership are addressed, Nigerians could build more houses faster. This, he said, was what the firm set out to do with the Easy Home scheme. “The whole idea is to provide individuals with free technical expertise and demystify the idea of owning a home. Lafarge Africa provides free cost estimate i.e. Bill of Quantity and designs for prospective builders. We also connect them with sources of finance as well as artisans that will build at the least possible cost without compromising quality,” Boyer explained.

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The Easy Home initiative, which began three years ago, has impacted positively on over 30,000 persons across 14 states of Lagos, Ogun, Oyo, Kwara, Ondo, Benin, Osun, Nasarawa, Niger, Cross River, Abia, Akwa Ibom, Rivers and Abuja. Beneficiaries of the scheme include Business people, civil servants and salary earners, who have used “Easy Home’s” menu of free services to build bungalows, duplexes, self-contained apartments, shops, schools, clinics etc.

“The demand for housing outstrips supply in the low-income segment where most live in rented houses. Presently, 5,000 households in mainly urban and peri-urban households earning N20,000 to N300,000 monthly have keyed into the Easy Home scheme. We, as Lafarge, estimates that nine million households can afford to build their property incrementally. Through Easy Home, Lafarge Africa is contributing to the reduction of the national housing deficit and helping to accommodate a large chunk of Nigeria’s population,” Boyer explained.

A consultant architect with a leading construction firm, Mr. Richard Ibilola, has praised the initiative. Easy Home, he said, will have a very significant and positive impact on the spread of good construction practices and the deepen building and construction supervision skills in Nigeria. For him, EasyHome will make it easier for Nigerians to step on the home acquisition ladder because it is designed to take significant initial costs burden away from house owners, and at the same time boosts the development of skills in the ecosystem.

A financial analyst with vast experience in mortgage matters, Mr. Kayode Oyedele, who explained that given the format of the initiative and having had a first hand experience of the scheme as a financial advisor to some beneficiaries, praised the initiators of the scheme. According to him, it is a delight that the Easy Home scheme is changing the perception of mortgage financing and affordable housing schemes in the country.

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“This should be encouraged. More programmes like this will happen in Nigeria only when there’s a mortgage system, which allows for the repayment of loans to acquire houses spread over 15-25 years. Such will give developers and banks an incentive to develop massive residential projects. Regulators will also find it much easier to monitor and punish builders responsible for defects,”Oyedele said.

To many of its beneficiaries, Easy Home is a huge relief. A pharmacist, Mrs.Ejiro Foyinbo, extolled the concept. She said the provision of free technical assistance, links to trusted builders, reliable retailers and qualified artisans, which the scheme afforded her, has helped to maximise her budget.

But this is not Lafarge Africa’sfirst intervention in affordable housing programmes. The firm, in collaboration with the French Development Agency (AFD) and LAPO microfinance, have long invested N1.3 billion to provide affordable housing in the country under its “Ile Irorun” affordable housing initiative, which started in October 2013. It was the firm’s first operation launched in the frame of AFD and Lafarge partnership to improve housing conditions through microfinance in Africa.

The “Ile Irorun”, was intended to enable low-income families to finance the construction, extension or the renovation of their houses and thereby help them improve their living conditions. In all, an estimated 3,500 Nigerians are expected to have benefitted from the programme by end of this year.

In 2015, Lafarge Holcim also unveiled a self-contained studio-flat at its Oregun, Ikeja, Lagos office, as a model for affordable housing for the low and middle income earners. The feat served as the bedrock for the firm’s planned delivery of a 500-unit of low cost housing in Gwagwalada, Abuja. The types being provided in this scheme include two and three-bedroom flats and studio types. Its prices range from N1.5million for studio model, while others are between N4million and N6million.

Stakeholders are convinced that the initiative is capable of bringing succour to the numerous Nigerians, who are daily losing hope of owning houses.


Building housing on flood plains another sign of growing inequality


Many cities around the world face a lack of affordable housing in and around expensive central business districts. Employers want cheaper labourers, who need more affordable housing in accordance with their lower salaries, to live nearby. So developers are invited to build on flood plains, without consequences. And often there is no public involvement in the decision.

Flood plains are easy to build on because they are flat and, in cities, they tend to be close to amenities. Yet all parties involved in housing know that cities are facing more rainfall and flooding due to climate change. Cities are now starting to prepare for catastrophic floods. and research has estimated flooding losses in the United States to be increasing dramatically.

Irresponsible and autocratic choices made by elites, at Waterfront Toronto for example, leave unsuspecting, lower-paid professionals in dangerous circumstances with rising insurance costs and potentially bad investments. That’s because, in the future, flood insurance may become prohibitively expensive or insurers may decide not to cover such high-risk properties, making them difficult to sell.

Difficult housing choices are reflective of a broader loss of worker power and associated income inequality. Research shows that densely populated areas are more vulnerable to disasters — the same disaster affects more people in dense environments. And where there is income inequality, there are more victims of natural catastrophes.

Cities dominated by appointed, un-elected officials, such as the board members of Waterfront Toronto, are helping to generate this inequality.

In the U.K., where there’s an ongoing housing crisis, government has approved building on flood plains as long as the new homeowners are made aware of the risks in advance. At least the British are having an honest conversation about it. In Toronto, we are not.

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New Orleans has long relegated its poorer populations to lower elevations by the Mississippi River, where floods and subsequent disease have devastated the city. The terrible treatment of Hurricane Katrina’s victims in New Orleans is a continuation of an enduring history of racism.

Research also describes how in the flood plains of Bangladesh, income inequality is related to a higher risk of flooding and lower preparedness to deal with floods.

In South China, increasing rainfall has left millions of the poor living in such dangerous low-lying areas that China’s president has called in the army.

Today, most North American coastal cities are in danger of climate-related sea level elevations and storm surges. Hurricane Sandy caught New York’s elite off guard because they became victims too. It didn’t matter whether you were in the Upper East Side or in Harlem.

In wealthy south Florida, saltwater rises not only directly from the sea, but also up through porous limestone, so Miami cannot use the same climate adaptation approaches as in some other cities, like adding green space. Miami is working to add pumps and other infrastructure instead.

Toronto could turn its remaining waterfront space into parkland, instead of housing developments, as a protective barrier.

New York City is going to build a wall around the lower part of Manhattan, and add a park. The Dutch are using public space to absorb floodwater. New Orleans is building parks to double as reservoirs for floodwaters, on the advice of the Dutch.

Toronto has had a few waterfront floods over the years, including this year and last, damaging the Toronto Islands in 2017. The city faced several storms in 2018 with violent winds and flooding downtown. Some wealthy Torontonians leave the city for private lakefront properties in cottage country, but others live within limited space affected by the aftermath of catastrophes. The Toronto Islands recovery, for example, is still ongoing and has not yet been fully paid for.

Meanwhile, new Toronto lakefront condominium developments are proceeding in the Quayside and Portlands neighbourhoods, near the Islands, on flood plains historically contaminated by heavy metals, oil and coal. “Workforce housing” is a required part of the plan.

Will Flessig, former Waterfront Toronto CEO, says that middle-income professionals are expected to settle in the waterfront condominiums so that they can be closer to where they work.

But no one in Toronto is talking about the flood plains, since elected officials apparently consider the issue resolved. Based on a plan developed in 2007, the federal and provincial governments are investing $1.185 billion to reconstruct the mouth of the Don River so that the water safely flows into Lake Ontario.

However, the waterfront area still remains a flood plain, and is still affected by storm surges associated with climate change.

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Building on flood plains has serious consequences, including future uninsurable buildings as insurance companies anticipate they won’t be able to afford the payouts. A single major flood causes a great deal of damage and requires insurance companies to pay all at once. With a higher frequency of catastrophic floods and the corresponding required payouts, the pool of insurance premiums collected to cover the losses dries up, and insurance companies face bankruptcy.

Before that happens and buildings are left derelict, people and property are endangered. We recently saw life-threatening flooding of buildings in Toronto, and there are limited rescue personnel to address all of the issues at the same time when mass floods happen.

Simultaneously, damage to personal property can be overwhelming — for example, to cars and contents within condominium lockers in underground parking garages. In Toronto, we have also seen streetcars submerged in water recently with people trapped inside.

Fixing the damage therefore adds costs to public transit. Water quality and disease concerns are also heightened as storm sewage systems cannot handle increasing rainfall volumes. Over the longer term, repeated flooding also weakens building foundations.

On a broader scale in the Great Lakes region, the ability to adapt to changing conditions is reduced. That’s because the ability of water officials to manage water levels is much more difficult when condominiums and other housing is built on flood plains.

For example, water flows are somewhat controlled in the Lake Ontario and St. Lawrence River watersheds through an international agreement called Plan 2014. If buildings are in the path of water flow, this complicates and limits the range of adjustment options.

We know now what we’re confronting. Let’s learn from past mistakes. In the best interests of homeowners, the public and climate adaptation, what’s left of Toronto’s waterfront should be public parks, not condominiums billed as “workforce housing.”

Deborah de Lange

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