Ask And Get Answers In Real Estate From The Expert

QUESTION:

What are the critical parameters to be considered if/when housing is to be made affordable?

ANSWER:

Housing affordability means that the selling price is within the reach of low income earners in a society. It is about housing for the bottom of the pyramid.

This is usually a social responsibility of the government and it is under such programmes that you have the council flats in UK, the larger part of Festac ’77, Jakande Estates, The Iba Mass Housing Project of the current Government of Lagos State (Gov. Babatunde Raji Fashola) and other government low cost housing estate schemes in Nigeria.

The aim at this point is to meet the basic requirements in a shelter, all forms of luxury and excesses are avoided so as to attain the house type within very reasonable budget.

In my own opinion, there are 3 basic parameters for affordable housing and they are:

1. Design. The design of an apartment or house impact greatly on construction cost and for a building to become affordable spaces must be reduced to living, dining, room(s), convenience(s) and kitchen. Areas such as presit, study, laundry, terraces, veranda(s)/extra family lounge, etc are not necessities and therefore can be omitted.

Even after reducing what is provided for to bare essentials, there sizes also must be just appropriate because the bigger a house or an apartment the more the cost of construction. An affordable 3 bedroom apartment or house should not be occupying more than between 80-90sqm, anything above this will have left the region of affordability.

2. Building Material types/Finishing. Issue of affordability can also be considered when choosing the building material types. For example, there are more affordable materials apart from the regularly used sand-cement block like laterite blocks which require less amount of cement to stabilise and finish. It has also been proved to be better suited for our tropical climate. It is estimated that one can save between 30-40% of the building cost when laterite is used as against regular cement block.

The type of finishing materials too will be an area where some reasonable cost can be saved in construction. When flooring, screeding, terazo, tiling with verified, PVC, Marble, etc can be done and each option has its cost. For example, why do anything more than screeding areas where carpets or any other form of covering will be used within an appointment?

3. <>Finance. Mortgage provision along with an offering helps affordability a great deal especially when the cost and tenure of finance are very competitive. The interest rate/charges payable on a mortgage and the tenure of the loan are critical elements of affordability, the lower the rate and the longer the tenure, the more affordable the house type because it means more people will be able to take and repay such loans based on their current earning since according to mortgage best practises, individuals are not allowed to spend more than about 33% of their earnings on housing.

Housing stock is usually very low in economies where appropriate/affordable funding parameters are missing and such is the case with Nigeria. Creation of housing stock was beginning to pick up some 4year ago (2007-2008) when our financial institutions began giving out loans for such purposes even though their rates where prohibitive. But further creation of mortgages has been greatly hindered by the present global economic meltdown.

The right mixes of the three points discussed above are in my opinion the parameters by which affordability can be achieved.

If you are interested in more information on proven strategies to own an affordable house, you can put a call/text to me through 08059899701 or send me a mail by clicking here.

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