From our Housing Stand (142)
The property sector in Nigeria faced a tumultuous year in 2024, marked by significant challenges and critical developments that shaped its landscape. This editorial delves into key issues such as building collapses, property seizures, rising material costs, and the urgent need for government intervention, providing a detailed analysis of each aspect.
Building Collapses: A Persistent Concern
The alarming rate of building collapses in Nigeria has been a persistent issue, reaching critical levels in 2024. Reports indicated that the country experienced at least 22 building failures between January and mid-July. Lagos emerged as the epicenter, accounting for approximately 27.27% of these incidents. Abuja and Anambra followed closely, each contributing 18.18% to the total collapses.
The Council for the Regulation of Engineering in Nigeria (COREN) has been vocal about the need for improved safety standards and regulatory oversight to prevent such tragedies. Many of the collapses can be attributed to factors such as inadequate engineering practices, poor construction materials, and a lack of adherence to building regulations.
For instance, a notable collapse in Lagos highlighted the consequences of unchecked construction practices. The building, which was still under construction, crumbled, resulting in numerous casualties and injuries. Investigations revealed that the project lacked the necessary approvals and that the construction was being overseen by unlicensed contractors. This incident prompted calls for stricter enforcement of building codes and penalties for non-compliance.
Since 1974, Nigeria has recorded approximately 635 building collapse incidents, with Lagos leading in the number of occurrences. The historical context emphasizes the need for systemic reforms within the construction industry. Advocates have called for the establishment of an independent body to oversee construction projects, ensuring adherence to safety protocols and licensing requirements for contractors.
Major Property Seizures by Authorities
In a significant operation, the Economic and Financial Crimes Commission (EFCC) announced the seizure of 753 duplexes and various apartments in Abuja on December 2, 2024. This considerable asset recovery was linked to a former high-ranking government official, whose identity remains undisclosed, though speculation suggests that it may involve the former governor of the Central Bank of Nigeria.
The EFCC’s action was part of a broader anti-corruption initiative aimed at recovering assets linked to illicit activities. The seized properties, located in a prime area of Abuja, cover a substantial land area and represent a significant financial value. This operation was met with mixed reactions. While many citizens lauded the EFCC for its efforts to combat corruption, others expressed concerns about the fate of the seized properties.
Experts have called for the government to auction these properties to the public at affordable prices, aligning with initiatives aimed at increasing access to housing. The Renewed Hope Estates Scheme, introduced by the federal government, seeks to provide affordable housing solutions to citizens. Auctioning the seized properties could serve dual purposes: recovering funds for the government and providing much-needed housing to a growing population.
Widespread Demolitions in the Federal Capital Territory
Another critical event in 2024 was the extensive demolition of structures in the Federal Capital Territory (FCT). Minister Nyesom Wike faced significant backlash for initiating demolitions without thorough investigations, leading to the destruction of properties valued at an estimated N200 billion. Reports indicated that these actions rendered numerous families homeless, particularly in areas like Sabon-Lugbe.
The demolitions were reportedly based on claims of land allocation revocation and alleged violations of zoning laws. However, many affected residents argued that they had legally acquired their properties and had not received adequate notice or compensation. The Senate intervened, urging the minister to halt further demolitions unless authorized by the courts, reflecting growing concern over urban planning and land use in the capital.
In response to public outcry, the Senate established an eight-member panel to investigate the circumstances surrounding the demolitions. This committee’s findings could lead to policy changes regarding land use and property rights, emphasizing the need for transparency and due process in government actions.
Rising Costs of Building Materials
The unification of the foreign exchange market significantly impacted the prices of building materials, leading to increases of over 100% since the current administration took office. Key materials such as cement, steel, and windows experienced staggering price hikes. For instance, the average price of cement surged from N4,300 to N9,000 per bag within a year. Similarly, the cost of iron rods escalated dramatically, complicating construction projects and contributing to a rise in abandoned developments.
The soaring costs of materials have made it increasingly difficult for developers to complete projects and have contributed to a growing housing crisis in Nigeria. With inflation affecting various sectors, many developers are forced to increase prices for end consumers, leading to reduced affordability for potential homebuyers.
This situation has raised concerns among industry stakeholders, with many calling for government intervention to stabilize prices. Some suggest establishing a price control mechanism for essential building materials, while others advocate for the promotion of local manufacturing to reduce reliance on imports.
Calls for Government Intervention
In light of the myriad challenges facing the property sector, industry experts have increasingly called for the establishment of a real estate intervention fund. Such a fund would aim to alleviate the pressures faced by developers and help realize the government’s vision of affordable housing across the nation. The real estate sector plays a crucial role in economic development, and targeted intervention could foster growth and stability.
The proposed intervention fund could focus on several key areas:
- Subsidizing Building Materials: Providing subsidies for essential materials could help stabilize prices and make housing more affordable. This could involve partnerships with local manufacturers to produce high-quality materials at competitive prices.
- Supporting Developers: Financial assistance for developers facing challenges due to rising costs could help ensure project completion. This support could take the form of low-interest loans or grants for affordable housing projects.
- Enhancing Regulatory Frameworks: Strengthening regulatory frameworks could improve safety standards and reduce the incidence of building collapses. This could involve increased training for contractors and the establishment of a robust licensing system.
- Promoting Public-Private Partnerships: Encouraging collaboration between the government and private sector stakeholders could lead to innovative solutions for housing shortages. Public-private partnerships could facilitate the development of affordable housing projects that meet the needs of diverse populations.
Conclusion
Reflecting on the events of 2024, the property sector in Nigeria stands at a crossroads. With ongoing challenges such as building collapses, rising costs, and regulatory scrutiny, stakeholders must collaborate to create a safer and more sustainable environment for development. The lessons learned last year will be pivotal in shaping the future of real estate in Nigeria, ensuring that it meets the needs of its citizens while fostering economic growth.
As the nation moves forward, it is imperative that the government, industry experts, and citizens work together to address the pressing issues facing the property sector. By prioritizing safety, affordability, and transparency, Nigeria can build a stronger foundation for its real estate market, ultimately contributing to the overall prosperity of the nation.
