The stakeholders, who spoke at the recently concluded three-day Abuja Housing Fair, which was organised by FESADEB Communications Limited, noted that the move would eliminate excessive profiteering by landlords and property developers.

“There is a need for a regulatory framework that will cap prices at which houses can be sold. This is to checkmate excessive profiteering by private landlords and estate developers, and save low-income earners from exploitation.

“There is also a need to encourage corporate organisations to incorporate the provision of homes for the communities as part of their corporate social responsibility,” a communiqué issued at the end of the fair read in part.

It added that the private sector and development partners needed to drive research for and development of alternative building technologies in terms of providing the financial resources and technical assistance for tested solutions to drive structural transformation.

According to the communiqué, the challenge of poor infrastructural facilities to providing affordable housing needs to be addressed.

Participants at the fair noted that the Federal Government had over the years put in place a number of initiatives to grow the housing sector, the most recent being the setting up and operationalisation of the Nigeria Mortgage Refinance Company; and the development of the Land, Housing and Urban Development Roadmap to promote national building standards in collaboration with private developers to enhance the implementation of the government’s housing vision.

Another, according to the participants, is the establishment of vocational training centres to build the capacity of unskilled workers involved in the housing delivery chain.

The communiqué, however,stated that in spite of the potential for growth in the mortgage market proffered by these initiatives, the evolution of the housing sector had remained replete with new dynamics, which required sustainable solutions to broadening access to affordable housing.

The communiqué added, “Part of this solution is building synergy among all the stakeholders and adopting a value chain approach to housing delivery in Nigeria. Over the years, focus has been on closing the housing deficit gap, which in the real sense is misleading and not sustainable. This has resulted in treating the various components of the housing delivery chain as individual entities, hence it has yielded unsustainable results.

“For more sustainable progress to be made towards solving Nigeria’s housing problems, there is a need to de-focus closing the housing deficit gap, and to pursue overarching value chain and market-based approach, which links together all the various components of the housing delivery chain.

“Some of the approaches currently adopted to address the supply and demand sides of housing finance are fashioned ‘top-down’, bereft of sufficient stakeholder participation and inclusive engagement that are critical for successful implementation.”

According to the communiqué, the stakeholders noted that high cost of housing as well as limited debt finance options and mortgage insurance appeared on top of the lists of issue affecting access to housing finance.

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Ubosi said in an interview with our correspondent that the impact of the rising prices of construction materials meant that the cost of producing houses and other construction projects would be higher and the final products more expensive.

He said, “As the exchange rate fluctuates, the prices of local and imported construction materials as well as labour will rise and have long-term effect on the prices of housing, impacting on the final products in the sense that they become more expensive because the cost of production is higher.

“The result is that the vendors want higher returns to cover their costs and justify their investments. As the fluctuation impacts on prices of everything and their lives generally, real estate owners begin to search for other means of cushioning their increased expenditure and one of these means is through their investments as they seek to bleed these investments for higher returns. The resultant effect is demand for higher prices or higher rents from tenants or buyers of these properties.”

According to him, real estate does not react immediately to exchange rate fluctuations like regular commodities but in the Nigerian experience, where exchange rate fluctuation will move prices higher, the result will most likely be that the prices of local and imported construction materials, and labour will rise.

He noted that most developers were already feeling the effect of the unstable exchange rate on their projects but had yet to take major investment decisions.

Ubosi stated that another long-term effect of the fluctuation would be the movement of people from certain locations to less attractive neighbourhoods.

He said, “When people cannot afford certain neighbourhoods where they are living, they will have to relocate to less attractive neighbourhoods where they can afford the rents or purchase with a mind-set of a certain high price; so, they are willing to pay rents slightly higher than what the precinct will command, but at the same time, less than what they would have paid in the areas where they are coming from.

“A simple illustration is a man living in Ikeja GRA whose rent has been increased from N2m to N3m per annum as his landlord seeks to cushion the effect of the currency fluctuation. If he moves to Dopemu, he will be willing to pay N1.8m per annum, saving himself N200,000, but forgetting that Dopemu rents were actually between N1.4m and N1.5m per annum. What his action has just done is that he has set new standards for rents.”

Ubosi, however, said the effect of the exchange rate fluctuation would take a little while before trickling down to the final consumers.

PUNCH.

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