Developers cannot build affordable homes at 30% bank loans, Nigerian strategist says

Real estate developer and investment strategist David Assogba-Lissassi has said developers cannot deliver affordable homes in Nigeria while bank loans cost more than 30%, pointing to weak regulation as a further driver of housing costs.

Speaking in an interview with Arise News, he said the high cost of finance, land, building materials and labour has made it increasingly difficult for developers to provide homes that ordinary Nigerians can afford. “Not me that collects loans from the bank. And the bank is asking me to pay about 30 something percent. They are asking me to build affordable houses. So we shouldn't deceive ourselves,” he said.

He argued that Nigeria lacks effective regulation capable of controlling excessive costs in the housing sector, and said a proper regulatory system should prevent excessive gains and unreasonable increases in house prices. “There's no affordable house anywhere now,” he said, adding that the government has shown commitment to housing but needs to make the mortgage sector accessible to everybody.

Assogba-Lissassi called for government to partner with developers by providing land and basic infrastructure and easing access to loans. He cited Rwanda, where he said government provides roads, electricity and water to housing estates and so reduces the burden on developers, whereas in Nigeria developers provide infrastructure themselves.

He also pointed to transportation, saying more efficient transit systems would let workers live outside expensive employment centres, and repeated that Nigeria's housing deficit stands at about 14.9 million units. He said the way forward is for government, regulators, financial institutions and developers to return to the table and find practical solutions.