The popular narrative in Nigeria’s property market is that houses are unaffordable and it is truly so, especially in the big cities of Abuja, Lagos and Port Harcourt where over 80 percent of the residents are renters.
House suppliers cite high cost of land, expensive building inputs which are largely imported; lack of critical infrastructure and cost of funds, for the affordability issues in their market.
But there is a new narrative in town. Millard Fuller Foundation (MFF) has just proved that it is possible for a low income earner to own a home without the high risk of breaking banks. The developer has also proved that delivering houses that are affordable is not rocket science.
MFF describes itself as a faith-driven organization out to promote collaborative partnerships with individuals and organizations in a bid to provide affordable le housing for those in need.
So far, it has partnered Reall and Family Homes Funds (FHF) and the results have been phenomenal. The company’s partnership with FHF is understandable. The family fund is a social housing initiative promoted by the federal government as part of its social intervention programmes.
The fund has an initial shareholding by the Federal Ministry of Finance and the Nigeria Sovereign Investment Authority, focused on affordable homes for Nigerians on low-income.
According to a recent report by Estate Intel, an independent provider of African real estate research and data, MFF is selling 200 one-bedroom studio apartments for ₦2.8 million each in the outskirts of Abuja.
The report recalls that in 2016, Reall UK, as part of its contribution to bridging Nigeria’s housing gap, partnered with MFF to fund the first phase of the GrandLuvu Estate situated in Luvu-Madaki, Masaka, Nasarawa on the outskirts of Abuja.
GrandLuvu Estate features 600 units of one and 2-bedroom semi-detached bungalows targeted primarily at a specific group of Nigerians earning between ₦50,000 to ₦150,000 a month. The 32-square metre one-bedroom homes have a sales price of ₦2.8 million, an equivalent of $8,040.
Questions have been asked as to what MFF has done differently to account for the affordability of their houses. The answer is simple. The company, apparently, dimensioned its target market and decide to keep its cost low by delivering just functional homes for low income buyers.
According to the estate intel report, “the construction of the ₦2.8 million ($8,040) house results in an estimated cost of ₦2.3 million ($6,394.98) even without receiving any form of government support on land purchases.”
The components of each building include 150mm hollow sandcrete block walls, Aluminum casement windows, sharp sand from a river and cement from Dangote Cement plc, Obajana plant. Others are screeded floor finish, wet rooms and kitchen tiles (floor and walls; backsplash in the kitchen).
There are no kitchen cabinets installed, internal painting (one coat only). The houses are externally finished with tyrolean with window and door panels painted. It has electrical conduit & wiring; no fittings. All plumbing fittings are installed with water connected with PVC ceiling finish. The roofing is done with 0.55 long span Aluminum roofing sheets on well-seasoned wood trusses.
The houses boast such facilities as overhead and underground water tanks from industrial boreholes; laterite graded road network; dedicated estate transformers with power connected to homes, good drainage layout, good sewage and refuse disposal system, and adequate water reticulation for home consumption.
The report recalls that, in 2018, FHF bulk-bought 400 completed units for resale, meaning that MFF was able to completely re-pay the original loan to Reall.
The houses were then sold to first-time homebuyers on an owner-occupier basis through a bridging facility provided by the Fund pending the release of applied mortgages by the Federal Mortgage Bank of Nigeria (FMBN). Some units were also sold through an internal mortgage arrangement provided by MFF.
MFF won the award for “The Affordable Housing Project of the Year 2018” for the 3rd consecutive time at the Nigerian Housing Awards. Recently, the Centre for Affordable Housing Finance found the GrandLuvu Estate to be the most affordable African home to be sold by a private developer.