The Federal Government has unveiled plans to strengthen regulation of the housing and construction sector through mandatory licensing for property developers and agents, as well as the introduction of escrow accounts to protect home buyers.
The Minister of Housing and Urban Development, Engr. Dr. Muttaqha Darma, disclosed this on Tuesday at the opening of a three-day Stakeholders’ Validation Workshop on the National Housing Data Programme and the Regulation of the Built Environment in Abuja.
According to the minister, the real estate sector contributes about 13.4 per cent of Nigeria’s Gross Domestic Product (GDP), estimated at about N41 trillion, adding that when combined with the construction sector, the industry’s value exceeded N77 trillion last year.
Darma, however, expressed concern over the inadequate regulation of the sector. “We put regulations in place for banking and got stability. We did the same for telecommunications and moved from less than 500,000 lines to over 200 million. We regulated oil and power. Housing was left out,” he said.
He explained that the draft National Housing and Built Environment Regulation Policy proposes reforms in six key areas, including the licensing of developers and estate agents, compulsory escrow accounts for buyers’ funds, registration of professionals, enforcement of the National Building Code, improved land administration and the establishment of a national housing data centre.
The proposal also recommends the establishment of a National Housing Industry Regulatory Commission to oversee the sector.
Darma cited Dubai’s experience on housing matter, saying that compulsory escrow arrangements has strengthened confidence in its property market.
He added that stronger regulation would also help address the recurring cases of building collapse by ensuring compliance with professional and construction standards.
The minister further revealed that on housing finance, about six million Nigerians currently contribute to the National Housing Fund (NHF), with the Federal Mortgage Bank of Nigeria (FMBN) collecting between N120 billion and N150 billion annually.
He, however, noted that mortgage penetration remains low prompting the proposed National Mortgage Industry Policy to improve access to housing finance.
According to him, the proposal includes reforms to the FMBN, the establishment of a National Housing Finance Authority, and measures to enable informal sector workers, including traders, artisans and commercial drivers, to participate in the NHF scheme.
He added that the government also plans to introduce a diaspora housing window to encourage greater investment by Nigerians living abroad.
Darma further said the ministry’s technical committee had reviewed available data and estimated Nigeria’s housing deficit at about 15 million units, using data from international development agencies.
He urged stakeholders to scrutinise the methodology to ensure that future housing policies are based on credible data.
The minister acknowledged that the proposed reforms could face opposition from we some stakeholders but reaffirmed the government commitment to improving transparency, accountability and investor confidence in the housing sector.
Earlier, the Permanent Secretary of the Ministry of Housing and Urban Development, Dr. Shuaib Belgore, said participants would review the report of the ministerial task team on building collapse as part of the workshop.
He added that the ministry had developed a framework for a National Housing Data Centre and urged stakeholders to make meaningful contributions to the policy review process.
