5 OBSTACLES TO HOME OWNERSHIP AND HOW TO OVERCOME THEM
As you read this, you probably have a target to buy your first apartment this year 2024. And if you already own one, you are probably already working towards getting a second or a third in the city of Lagos. Great dream! This is because home ownership is a fundamental aspect of stability and security for individuals and families. In Nigeria, where the housing market may not always be the most favourable for potential buyers, the importance of home ownership cannot be overstated. It is the reason why most people don’t feel accomplished or fulfilled without having a property in their name.
There are several reasons, ranging from economic benefits to social and emotional well-being, why owning a home is crucial for Nigerians.
Take the financial aspect of owning an apartment/home in Lagos, Nigeria for instance. Owning a home provides a sense of financial security and stability. As opposed to renting, where monthly payments may fluctuate and be subject to increases, owning your own home provides a fixed cost of living. This stability allows individuals and families to plan their finances more effectively and allocate funds to other important areas, such as education, healthcare, and investments.
In addition to that, home ownership serves as a form of wealth accumulation and asset building for investors. All over the world, real estate is often considered a lucrative investment, as property values tend to appreciate over time, regardless of prevailing economic situations in the country. By owning a home, individuals have the opportunity to build equity and create a valuable asset that can be passed down to future generations. This form of intergenerational wealth transfer is particularly important in Nigeria, where the concept of family and inheritance is highly valued.
Furthermore, home ownership contributes to the overall economic development of the country, meaning a homeowner is a valued contributor to economic growth. The construction and real estate sectors play a significant role in the country’s GDP, providing employment opportunities and stimulating economic growth.
On a social level, owning a home gives you a sense of community and belonging. Owning a home allows you to put down roots and establish connections with your neighbours and the local community. This sense of belonging can lead to stronger social connections, increased civic engagement, and a greater sense of pride in your surroundings.
In some societies, owning a home confers you some prestige and opportunities that are not available for others. Some people are given titles after several years of owning properties in a particular community. This is besides the fact that homeowners are more likely to take care of their properties and contribute to the overall improvement of the neighbourhood, leading to a more attractive and vibrant community.
Also, from a psychological perspective, home ownership can have a positive impact on your well-being and mental health as an individual. Studies have shown that owning a home can lead to greater feelings of security, stability, and control over one’s living environment. This sense of ownership can instil a sense of pride and accomplishment, boosting self-esteem and overall happiness in you.
So, with all these benefits of owning a home in Lagos, why are you yet to acquire yours, especially if money is not the problem?
Even though the poverty rate in Nigeria is quite high, the home ownership rate is quite low for a country as big as Nigeria. For example, the home ownership rate in Nigeria is less than 20% compared to countries like the United States of America with a home ownership rate of 66 per cent as of the fourth quarter of 2022. In the same 2022, 68 per cent of householders in the United Kingdom were homeowners. Also, it is reported that countries like Laos had 96 per cent, Romania had 95 per cent and war-torn Vietnam had 90 per cent.
So, if you are not among the 20% of Nigerians who own homes, what could be responsible? As a Nigerian desirous of owning a home, here are some obstacles to your home ownership dream and their potential solutions:
Home Ownership Obstacles
The first obstacle to home ownership in Nigeria is affordability. Prices of houses have been on the rise across Nigeria, especially in urban areas, making it increasingly difficult for individuals, especially low and middle-income earners to afford a home of their own. In major cities like Lagos and Abuja, the cost of a modest home can be out of reach for many middle-class families. Building from scratch also presents its own peculiar challenges in terms of affordability of land and expensive building materials.
If this is your challenge delaying your home ownership, I am glad to tell you that there is a solution. First, find an affordable apartment, one within your financial reach. Instead of a three-bedroom apartment, you could go for two bedrooms and if you can’t afford two bedrooms, you could go for a bedroom apartment that, at the very least, can accommodate your immediate family. Then look for an off-plan property with a good purchase plan where you can pay over a long period. You can leverage the Federal Government Housing Mortgage Scheme that allows you to pay for a property for as long as 30 years.
Co-ownership is also an option that you could explore. There are housing products that come with the offer of co-ownership, which allows you to pull resources together with others to buy an apartment.
The good news is that you could get all these options by buying a property from PWAN Stars. PWAN Stars is one of the fastest-growing real estate firms in Lagos with choice properties spread around Sangotedo, an area that is becoming a prime location for real estate development. PWAN Stars is renowned for its affordable properties, varied options for buyers, partnership with the Federal Mortgage Scheme for property ownership over a 30-year period and other fantastic options such as co-ownership of properties.
Explore any of these options and you can be guaranteed to become a property owner before the year runs out.
Another obstacle to home ownership in Nigeria is poor knowledge of available financing options, especially the mortgage facility. This is closely related to the first obstacle explained. The Federal Mortgage Bank loan has been available to Nigerians for several years now, but many people still claim ignorance of the facility thus depriving themselves of opportunities to own their buildings. As I stated, you can approach PWAN Stars for options that allow you to benefit from the mortgage facility as you acquire your property with ease.
The third is low financial literacy. The financial and money literacy level in Nigeria is generally low and so even though many people are literate, they lack basic investment knowledge. For instance, some people consider building their houses from scratch even though it’s in the outskirts of town as a smarter financial decision than buying an apartment in the middle of town. Unfortunately, such people might find it difficult to save enough money to build their house in record time.
However, they fail to understand that buying an apartment in an urban area gives you leverage including access to the workplace, access to business opportunities, solid network building and overall quality of life. In addition to that, you don’t need to pay through your nose to start your home ownership journey (with the options highlighted). With a reasonable down payment and monthly mortgage option, you can take ownership of your apartment and live in it while paying up. Information is indeed power.
The fourth is self-discipline. The only obstacle to the home ownership dream of some Nigerians, especially those who wish to buy apartments in Lagos is self-discipline. While some are making enough money to buy an apartment, they lack the financial self-discipline to successfully embark on the project.
To achieve the dream of owning a home, you must possess the drive, determination, and discipline to save money, make responsible financial decisions, and stay committed to your goal.
One of the key reasons why self-discipline is needed to fulfil the dream of home ownership is the financial aspect. Buying a home is a significant financial commitment, and it requires careful planning and budgeting. Without self-discipline, you may struggle to save money for a down payment, manage your finances effectively, and resist the temptation to overspend on unnecessary purchases. By practising self-discipline, you can develop good habits, routines, and systems for managing your property and staying on track with your home ownership responsibilities.
The fifth reason is procrastination and over-shopping. Procrastination is a common behaviour that plagues many individuals when making decisions, particularly when it involves important choices such as purchasing a property. In real estate, procrastination can have significant consequences, as potential buyers may miss out on their dream home due to their inability to promptly commit to a decision.
One of the main reasons some individuals procrastinate when deciding on buying a property is fear of making the wrong choice. The fear of buyer’s remorse or of missing out on a better opportunity can paralyze individuals, causing them to delay deciding until they feel more certain about their choice. This fear is often fueled by the belief that there is always something better out there, leading individuals to continually search for the perfect property, even if it means missing out on a great opportunity in the process.
The consequences of procrastinating when it comes to buying an apartment, especially in a city like Lagos where the demand for affordable property is high, can be significant. In this kind of competitive market, properties can be snapped up quickly, and hesitating to make a decision can result in missing out on a great opportunity. The property that you love may be sold to another buyer who was more decisive, leaving you with regret and the realization that you missed out on your dream home.
On that note, I wish you success in your quest for home ownership in the remaining months of 2024.
