In this interview, Dr. Gbadewole Amos Kayode who is the CEO of Crown Luxury Properties, says the federal government can reduce the 24 million housing deficit in the country if it can strengthen the mortgage system and provide land for developers to build cheap houses. Excerpts
How was the real estate sector like last year, compared to this year so far?
In 2018, real estate business was fair. And the tempo has moved up. Before high-end products like those costing N100-N200 million were what was selling but the market came down because there is a change in taste in real estate business. Before, people preferred to buy built houses, but now, many buy land and prefer to build themselves to save cost. So because of the situation of things in the economy, the market shifted to the middle-class or lower class in society. The housing deficit in Nigeria is large. We need about 24 million houses. And one of the targets we set for ourselves is to add about 3,500 houses this year. By the grace of God, we have surpassed over 50 percent. We have 1,650 houses now. The issue is the mortgage system that has not been working well, and many people that are not even in the corporate environment are not qualified for a mortgage.
How affordable are these houses for the common man?
Our properties range from N500,000 a plot to N220 million for a 5 bedroom fully detached duplex block. We provide for different classes in society. So for as low as N500,000 you can get a plot.
What are the challenges to affordable housing in Nigeria? The major challenge is the fluctuation in the price of building materials. The cost of cement and other building materials fluctuate and the variation affects projections. When you project to finish a house at N15 million, you may end up spending N17 million. It has never come lower. Another challenge is the availability of land in strategic locations. To secure land in strategic places is expensive. Then we have to create infrastructure, like roads and water ourselves. This is unlike what obtains in the developed world like USA. Developers are not recording as much sales as they did four-five years ago. The economy is just trying to adjust to the anti-corruption crusade which is very good. Because we need to be real. Now, if you don’t work, you don’t make money.
What policy do you think the government should pursue to help the real estate sector?
The government needs to strengthen the mortgage system. If that is done, many people will be able to buy houses, and land to build their own houses. As things are now, only 17 percent of Nigerians can apply for a mortgage, and not up to six percent are having access to it. And some times you wait up to three years before you get access to the fund. So, the government needs to do more in that area. However, I think the government is doing something for civil servants, like the Federal Integrated Staff Housing (FISH). It is doing it in partnership with the Real Estate Developers Association of Nigeria (REDAN).
How affordable are those houses?
We can build affordable houses. Like what we have in Crown Heritage in Oshogbo. We are building two bedroom flats that we are selling for N4.5 million. Three bedrooms flat for N6.5 million. In Abuja, we can do the same thing if we have access to funds and the interest rate is not much. We can do that in Kuje where we have access to cheaper land. So with the support of the government, we can provide affordable houses for Nigerians. If I were the minister of Works and Housing, I will work with stakeholders in the real estate industry. We have the clients, developers, financial institutions and the Federal Mortgage Bank. The major actors are the Federal Mortgage Bank and the developers. Normally, we should have free land allocation. If we can get land in the suburbs for free, then the cost of land will be out of it. Also, if we get access to finance at cheaper rates, we can provide 2 bedroom flats at even N2.5 million. And if you spread N2.5m in 10 years, people will buy houses more comfortably. And they may just be deducting N25,000 from your salary and you will be living in your house. You will be doing rent to home. With this, we will be able to tackle the N24 million housing deficit in six years