Housing needs of low-income earners in northern, western Nigeria worth N309.2tr, to reach N381.7tr in 2020-study

As Nigeria working towards her goal of becoming one of the top 20 developed economies in the world by 2020, adequate shelter is one of the essential needs Nigerians are agitating for. Housing needs of low-income earners in northern and western Nigeria have been discovered to worth N309.2 trillion in 2017 and expected to reach N381.7 trillion in 2020.

This was the outcome of 2017’s Low Income Housing Outlook study carried out by Enterprations Limited, a Lagos based management consulting company.

Analysis on the purchasing power parity of Nigerians at the bottom of the pyramid using World Bank’s projection, National Bureau of Statistics’ recent population estimates and affordable housing modelling shows that low-income earners (at the BOP) could only afford a house of N1, 389,228, averagely.

“The measured BOP market for housing in three regions for 2017 is N309.2 trillion. This comprises southwest, northwest, and northeast. This is expected to reach N381.7 trillion by 2020. In 2017, the northwest market is the biggest with over N118 trillion followed by the north-east with more than N115 trillion while southwest had the least (N103.9 trillion).

Our analysis for 2020 also indicates that northwest and north-east markets are huge more than Southwest’s market (N123.5trillion). The northwest market is expected to be N148.7 trillion while north-east would be N144, 1 trillion. Our projection increase is based on the percentage of people living at the pyramid in the northwest (77.7%), north-east (76.3%) and southwest (59.1%), according to the National Bureau of Statistics. The Annual Growth Rate for the north-west region is 7.8% while north-east and southwest are expected to grow by 7.6% and 6.0% respectively.”

To capture the market, house builders and real estate developers need to embrace Blue Ocean Housing Market Grid. “It is a tool that challenges house builders or real estate developers to think about which acts and activities they should do less of because they isolated low-income people (BOP people) from becoming homeowners, and which they (house builders/real estate developers) should do more because they make people at the BOP proud homeowners,” the study highlights.

Mutiu Iyanda, who wrote the report and Research and Communications Executive notes that “opportunities in this market are substantial. Private companies and entrepreneurs with right innovative ideas to enter the market could venture into materials manufacturing to retail, distribution, slum upgrading and developing into affordable houses, and financing.” 

Download the study here