Among the focus group, 41.7% were between 18 – 25 years, 33.3% were between 26 – 35 years, while 25% were between 36 – 45 years old. About 33% earned between N150,000 – N200,000; 33.3% earned between N200,000 – N300,000; 16% between N80,000 – N150,000 while 8% earned N500,000 and above. On if they are interested in owning a home or investing in real estate, 66.7% said ‘yes’, 16.7% said ‘maybe’, and the rest replied ‘no’.
The three significant factors selected by the focus group that would motivate them to invest in real estate include access to funds, innovative products, and brand trust. Others include word-of-mouth and, lastly, relatable marketing (with language and platforms that directly address their needs).
Based on an analysis, home ownership could be extended to more than 50% of the population if homes were built for those with an annual income of N340,000, or about US$2,000. Incremental building and cooperatives could meet the needs of another 25% of the market. The construction sector is also currently unable to meet this demand due to several weaknesses, such as lack of skills at all levels, weak organisational capacity, lack of access to finance, and lack of standardisation of building plans and materials.
“Previously, the minister of Works and Housing, Babatunde Fashola, explained that there is no low-cost building material, so the country cannot successfully maintain low-cost housing,” said an expert who also led marketing for a real estate company. “But that does not account for low-cost designs and scale, and the marketing strategy has to improve. First, apart from the government housing, private organisations have to commit to invest in low-cost housing willfully. Secondly, there has to be targeted marketing that explains the accessibility and procedures for getting them. Unfortunately, millions of young Nigerians are turned off when they hear the millions of naira they have to make as an initial payment”.
The housing deficit in Nigeria has often been misdiagnosed as a cost rather than an affordability problem, and there are deep beliefs that houses in Nigeria are expensive. Furthermore, the mortgage market cannot provide sustainable long-term loans to borrowers due to a lack of access to long-term funds. A survey by the Central Bank of Nigeria (CBN) in 2012 revealed that financial institutions described this as the number one obstacle preventing the growth of the mortgage market, ahead of foreclosure, housing supply, and the cost of title registration.
“The housing and ownership opportunities for young Nigerians are minimal, and the rising inflation is not making things easier,” said an expert. “With the constant increase of unemployment and cost of living, it is difficult for more young people to invest or even think about owning a home. For example, Lagos is home to 22 million people and counting, more than double those in New York and London combined. However, an estimated two-thirds live in face-me-I-face-you buildings, slums, and crowded shanties. There are real estate opportunities for such a large population, but the most crucial factor that needs to be addressed is poverty among young Nigerians”.
Housing and infrastructure investment have been strongly linked to economic growth. An increase in housing production, especially at the lower reaches of the market, will amplify job creation, both skilled and unskilled. While the availability of housing finance is essential for increasing housing production, sustainable, and equitable housing production also depends on legal protections, access to residential lands and essential services, an efficient and transparent land administration and a macroeconomic environment that maintains low inflation and low-interest rates.