Experts Knock FG, Says N7.2m Price Tag On One Bedroom Flat Dashing Hope Of Homeownership Among Low Income Earners

 

Disturbed by the exorbitant prices of housing units launched by the Federal Government through the National Housing Programme (NHP), real estate experts say the N7.2 million price tag on the one-bedroom flat under the scheme has dashed the hope of homeownership among low-income Nigerians. 

They described the prices as the “beginning of a full capitalist economy” in the country, adding that low income Nigerians would need N40,000 monthly repayment for the next 30 years to gain access to the one-bedroom apartment.

Going by the high price tags, real estate experts pointed out that no civil servants/workers between the Grade Level 1 and 10 under the national minimum wage of N30,000 could qualify for any of the housing units if they are to use 25 per cent of the salary for monthly repayment for the next 30 years. Nigerian Tribune gathered that the gross monthly salary of government’s workers within Grade Level 10 and 12 is between N100,000 and N120,000.

Since these workers cannot spend more than 25 percent of their monthly income to service loans, experts said that most of them would not be able to afford N40,000 monthly repayment for housing loans.

Describing prices as outrageous, a former General Manager with Aso Savings and Loans Limited, Mr Fonahanmi Idris, maintained that that hope of homeownership among many Nigerians has been dashed.

Decrying the high prices, Idris said the government has left the average Nigerians with no option but to continue to live in exclusion and social denial of necessity.

The mortgage and housing expert pointed out that government’s business was to provide social goods and infrastructure support, including enabling business environments, urging the authorities to allow private developers to look for alternative inputs/materials for building. He recalled that before the advent of block/cement, people of old did build with mud and coconut tree and rafters. “It is high time the nation thought green,” he said.

The Minister of Works and Housing, Babatunde Fashola, had penultimate week unveiled a portal for the National Housing Programme, urging Nigerians to apply for allocation of available 5,000 plus housing units, ranging from one, two to three-bedroom bungalows and blocks of flats in any location of their choice across 34 states and the Federal Capital Territory.

He said the buildings came with variations in prices as a result of the cost of building and topography.

The one-bedroom house type costs between N7, 222,404 and N9, 268,751. A two-bedroom bungalow sells for between N9,148,378 and N12, 398,460, while three-bedroom bungalow ranges between N13,241,074 and 16,491,155.

Not impressed by the Federal Government’s exorbitant house prices, the chairman, HOB Real Estate Limited, Chief Olusegun Babatunde Bamgbade, said that the government was not prepared to bear any burden for the masses anymore. He said, “How can you build houses for the masses and sell them higher than private developers’ rates? Only God knows who the economic advisers of the government are. There is no human face in all the government policies and actions.

“Food is expensive not because there’s no food again, but the enabling environment is missing. Farmers can’t go to farms. Workers can’t go to sites. Everyone is afraid of being kidnapped.

“The security situation of the country will make everything expensive and unbearable very soon except drastic actions are taken against the miscreants constituting security breaches here and there.

“Cement is untouchable. The price is mind-boggling.”

The real estate developer urged the government to stop subjecting Nigeria’s local items and services to dollar rates.

He said, “For instance, they say electricity is undervalued when compared to dollar rates outside the country. The question is: how many people can afford the new rates be- ing charged by the service providers?

“Everyone is just milking the masses without conscience.”

Bamgbade noted that the implication of the high rate of Federal Government’s one-bedroom flat is that the houses will be acquired by the rich and rented out to the average middle man who is struggling to live under a roof – and a vicious cycle of poverty would continue.

On what becomes of poor Nigerians in need of housing, he said: “There is hope for homeownership for the masses if the masses can live within their means and go for houses in the villages.

“Gradually, the masses are abandoning the township houses; they are being forced to move To The Villages. It Will Get To A Point Where Inadequate Demand Will Force Down The Prices Of the overrated buildings.

“Go to Abuja; there are so many unoccupied buildings that have remained so for years.”

He believes that very soon, there will be so many unoccupied Federal Government’s one-bedroom flats if the price is not made commensurate with the reality of the masses’ purchasing powers.

However, he added that there was a need to consider certain factors that might have led the Federal Government into such decision, noting that the cost of building materials was astronomically high. Comparing the price of the federal government’s housing units with those built by the Ogun State government, the Chief Press Secretary to the Governor, Mr Kunle Somori, expressed surprise over the exorbitant house prices, when compared with the two and three-bedroom apartments being sold by the state.

He said, “We sell two and three-bedroom (semi-detached) houses for between 5.5 million and 7.2million; and (Federal Government’s) one-bedroom (unit) goes for 7.2million?

Somorin said that Governor Dapo Abiodun reviewed downward the sale of the 160-Unit AAK Degun Estate situated at Laderin, Abeokuta, from N7 million to N5.5 million for the 92 units of 3-bedroom semi-detached flats and from N5 million to N4 million for the 68 units of 2-bedroom apartments.

He stated that the governor even refunded payments to allottees who had earlier made full payments, adding that the state government also relaxed terms and conditions of sale of the units, including the reduction of interest rate from 18 per cent to 6 per cent.

Delta-based estate surveyor and valuer, Mr Lewis Afolabi, who expressed worry over the high house prices and implications on average Nigerians, argued that the lands upon which those buildings selling for N7.2million were acquired almost free by the federal government.

He said he was disappointed by the minister who had been pretending to have sympathy for low-income Nigerians by canvassing for monthly collection of rent to come out with such outrageous house prices.

“Imagine if the lands were bought at market value the way private developers do. That means it will be selling for N10 million upwards. Fashola needs an adviser on property valuation and investments to guide him,” he said.

Instead of selling those N7.2million flats, he advised that the minister should engage estate managers to manage them and collect monthly rent as a practical demonstration of his conviction.

“Until you show me evidence of monthly rent collection on your property, I can never trust you. Ordinary one-bedroom flat you are charging N7.2 million to sell to the masses – and you call that ‘affordable housing’?

“How many poor people that you pretend to love can afford N7.2 million to buy a one-bedroom flat?

“When the rich ones end up buying those houses, you will expect them to collect monthly rent?

“I put it to you that you are playing the game of sophistry with the mentality of gullible Nigerians,” Afolabi said.

Economist and an astute management consultant, Chief Babatunde Fanimokun, has advised political leaders to study the blueprint of the former civilian governor of Lagos State, Alhaji Lateef Jakande’s affordable housing rather than grandstanding.

The advice, he said, had become imperative following the insinuations by some Nigerian leaders that affordable housing delivery is no longer feasible.

Speaking at the 3rd Jakande Housing Lecture Series (JHLS), held in Lagos, Fanimokun enumerated some of the processes used by the former Lagos governor to achieve affordable housing, which he said included elimination of middle men, building on demands, emphasizing on labour only as well as government providing the land and provision of infrastructure.

According to him, Jakande was able to flag off a housing estate in Amuwo Odofin exactly 45 days after becoming a governor, which was completed within the first two years of his tenure.

He said the former governor did not only take care of the low-income earners as it was erroneously believed in some quarters as he introduced a Site and Service Scheme and Private Developers Scheme which made Lekki area of Lagos to account for over 150 private housing estates as at 2010, a development which has energized the economy of Lagos and made life better to the citizenry.