 A housing deficit occurs when a country's housing units are in limited supply. The causes of the deficit include lack of favourable government policies, high cost of construction materials, high property costs, and the lack of access to credit for potential home owners. In Nigeria, however, our sister affordable housing has largely stayed a pipeline for the vast majority, particularly the middle and lower classes, which takes about 80% of the populace. The matter of housing deficits has gotten worse over time with successive government grappling with it. The CBN has estimated an amount of $21 trillion narrowly needed to finance this deficit, and with a growing population of 200 million Nigerians, the current deficit is extremely high. Joining me now is Oladotun Oledi, an Oxford University-trained real estate investment expert with a remarkable truck record of creating real estate solutions for over 3,000 individuals in Nigeria and beyond through land schemes and property acquisition. His visionary leadership has empowered countless people to unlock dreams and achieve their property goals. Currently, he is spearheading one of the most ambitious real estate development in south-west Nigeria, a colossal project comprised of 1,000 unit housing developments in Nigeria. Ladies and gentlemen, let's make welcome Oladotun Oledi. Thanks for joining us on Business Insight. Thank you, Justin. Good to be here. It is indeed our pleasure. But it is really worrying to note that we have over 28 million housing deficits as the figures put in January this year. And according to the CBN, we need about $21 trillion narrow. How do we go about bridging this gap? Before you talk about bridging the gap, I'm one of the persons that argue that that data... Is it higher? No, I think it's higher because that's on a quantity basis that people don't have roof over their head. If you begin to look at where people live, the quality of their housing itself, you realize that the deficit is way more than that. So on a qualitative basis, the deficit is way more than that. And it's talking about bridging the gap. Firstly, we need to synergize. We need to continually talk about this. I don't think there are enough conversations. Even before you go about it, Andrew, you question about bridging the gap. I need to even understand how we got this wide gap as it is. Currently, Nigeria housing production per year is less than 100,000 units per year. And if you compare that with almost 3.5 growth in population every year, it's not matching up. Population is growing astronomically. Housing production is reducing. So that's where the deficit keeps coming from year in, year out. And to really bridge this gap, we need to continually talk about this. I don't think we have enough conversations about this. Secondly, there's need for collaboration. We need synergy between private sector and public sector. So over time there has not been synergy? Not enough. Presently, sometimes it often looks like the private and public sector are in competition. And it shouldn't be. There's need for synergy because there's just so much the government can do on their own. And there's just so much the private sector can do. But when these two come together, there's so, so, so much that can be achieved. And thirdly, there's need to streamline the process of land acquisition acquisition and tight to perfection, building approval. That is the base for housing production. Even looking at that, do you really think we might really get a headway in that? Because from the way it is stipulated in our constitution, all lands belong to the government and the bottlenecks are crazy? No, it's so chaotic. It's so expensive. So there's need to streamline this thing. That's the basis of... It goes back to the synergy that I talked about. We are not in competition. I think the government is more of a regulatory body when it comes to this thing. But it sometimes seems like government is profit-driven when it comes to this thing. And that sort of colors the intention and it becomes so chaotic. The bottleneck becomes so expensive. There's need to streamline this thing. Presently, for you to get a building approval for your project, you stand a chance of doing other things before you can get that done. So there's need for us to streamline that process. Government needs to come to the head of the private sector so that we are able to produce as much as possible. Okay. The way things are right now in the country would double digit inflation rates. I don't know. I see a situation where low-income earners might be drifting backwards towards the hinterlands moving away from the cities like Lagos because of this high cost of housing. What do you think? I don't think that's a bad thing, really. We can all congregate at the center. Okay. But here's the thing. In other places in the world, infrastructure precedes development. But in this part of the world, it's the opposite. Development precedes infrastructure. So the first thing that needs to happen here, there's need for proper infrastructure and access. So it will matter where I live and where I work. Once there's proper access, there's proper transport system, all this in aid development. A quick example, a reference point, is the railway between Lagos and Ibadon. I've not done the survey, but I can tell you that a lot of people commit through that transport corridor every day because it's easier. Why can't I stay in Ibadon where the cost of rent is lower, cost of access production and buying a house is lower, and there's a smooth transportation system that gets me to Lagos. These are the infrastructure that will aid developers to go to those interlands and those far places and put proper housing solutions in place because the people will come there because they know that they can always access the center anytime they want. Let's talk about financing housing, right? Because most people, be they in the informal sector or formal sector, almost everyone would want to be a landlord someday. Even if it's not in the major cities. But when all that is going on, I see a proliferation of developers, housing developers bringing all sorts of solutions to people that you don't need to pay one off payment, maybe pay, you spread the payment over the years so that you don't have to fill all of them, the issues at the same time. But is that really the best way to go? Because some of those developers, most of them are unscrupulous and where do mortgages come in all of this? Let me pick you up from where you said is that really the way to go? It's a way, but not the best. Because without developers, an average Nigerian doesn't stand a chance of even owning a house. Because the fact is, home ownership in Nigeria is less than 20%. Mortgage penetration, the mortgage you're talking about is less than 2%. So without the intervention of developers coming up with affordable pricing, flexible payment plan bridging the gap between you and government regulation not sorting their money less and making sure these things are just in front of you and giving you a simple payment plan, without those schemes and those strategies, some average income earners will never even dream of owning a house. But having said that, there's need for us to look at the mortgage itself. And I'm glad recently that the mortgage has jumped to 55 million error. From 50 million error, you can assess up to 55 million error. But like I said, there's need for constant awareness and talk over this thing. Some people don't even know. The question, if you ask an average Nigerian, is there mortgage in Nigeria? Most people, do you know? So whose responsibility is it to ensure that Nigerians are aware? They are sensitized about them. There's home finance and scheme and mortgages. Because in the western world, in other saner climes as it were, the mortgages are the norm. People just with a constant payment or a lot of personal payment, as in if you have a good credit and all that, you could actually just print payments over a long time, like 15 to 20 years. Yeah. There's need for synergy. The government, the private sector, the banks, the federal mortgage. There's need for synergy. Everybody works in isolation, like a competition. We need to synergize so that the proper awareness will go very far. I have a lot of clients and we recently did a survey asking them about mortgage in Nigeria and you'll be shocked that more than 70% of them isn't aware that it is possible. Is it just for awareness or maybe even the accessibility? So a lot of people are not aware. They are still at their awareness phase. Before we'll not talk about their accessibility. Then people who are aware, some of them feel it's not accessible. But again, there is a way to this thing. Until we continually bring this to the fore and talk about this thing. Nigerians will know these things. And until government themselves make it easy, even the accessibility part is chaotic. The process needs to be simplified. And if you're going to achieve meaningful gain in the housing sector in Nigeria, mortgage has to come in. Because the basis of all the problems we have in the real estate sector is finance. Yes, sure. Finance for the developer, finance for the end user. Even the supplier, everybody in the value chain. Financing is a problem. And until government comes in with its strong mortgage system, a stronger mortgage system, we might not be able to achieve meaningful development. I thought for years, over in the 80s, we used to have mortgage banks. Yeah. We see or help them this way. Yeah. That's another problem we have in the country. Continuity really. You know, continuity over time things. Good initiative gets eroded. And right now they're trying to bring it back. And the fillers from the government are going to be robust with mortgage, no credit system. These are the things that will really help Nigeria. Because liquidity is a thing now. It's a thing. Disposable income is very low. So to talk about home ownership now, it looks like it's a bad time. And this is the help that can aid people. So how do prospective home owners protect themselves? I'm getting somewhere because right now, there have been stories over time where people call others to just come and invest in land ownership. You do a little premium monthly. So in the next five years, you can actually get or start building your own property. But I've heard reports of unscrupulous developers who just want to collect money from people. How do we ensure sanity and ensure that when Nigerians are fully paying, they get value for their money? Yeah, first of all, I would say regulation has to be stronger. And I'll tell you why it's a bit loose. When a regulatory body becomes profit-driven, there is chances, high chance of... They have no reasons looking for profit. The goal of the body is to regulate and ensure people get value for their money. If you make money from it, it's secondary. So if money making is the first thing, then there will be serious problems. So regulation needs to be tighter around there. We know how unshakes happen and people can get away with things. All those things need to be cut away. For any system, any organization, any country that will have meaningful development, law and order is very important. So that's one thing. Secondly, the public, the people need to be aware. Self-education is important. Just like any business you want to do. You have no business doing anything without studying that thing first. That's another thing that I've gathered in my own study is that an heavy Nigerian is not aware through these things, through these gimmicks, through how this thing works to their own right. They need to be aware. You need to understand the regulation, the laws, your rights and everything. So that even you approaching the transaction, you have enough information. Then totally, you must use legal services. Legal services. Don't be stingy, don't be cheap. When you are too cheap, You might be shooting yourself. You might be shooting yourself. Use legal services. If you are not self-aware enough, you must seek for help. Let's talk about the current situation in the country. Everyone knows where the shoes are pinching right now. We turned a double digit inflation. Removal of fuel, subsidy and all of the other issues, macroeconomic issues that both businesses and even households are facing. How have all of that affected your business that's in building development or housing development and then payment plans? Can you just share with us? Firstly, it's affected the cost of construction. We are currently working on a project and the first round of procurement we did was at the price. And in the space of five weeks, we're doing another round of procurement and it will interest you that it's gone up by 15 to 20%. That's a bit high. That's a bit high, you know? And that's the volatility in the sector right now. Like you said, in all the sector, the cost of construction, the impact of the inflation is that the cost of construction has gone really, really high. And that has impacted also the cost of delivery and the prices of this house. So places before where you could buy a house at the 40 million era, right now you're buying at 60, 65 million era. And flexibility that comes with payment is not so flexible anymore because we don't also have flexibility when it comes to this procurement of this thing. The volatility is so high, you want to do your procurement at once, you want your customers to pay at once. And this particular inflation has also led to failure of a lot of projects. A lot of projects. You see some projects collapsing. It's compromise on quality. Why? Finance. Inflation. You see some projects abandoned because the cost overrun is unbearable. Okay, so as we run over right now, so what would you suggest? What are the preferable solutions? You talked about synergy between the government and of course the private sector, but what other solutions are we looking at in one minute as we run down? We see two things, developmental funds, more developmental funds in the country. You know, most time developers have to rely on commercial funds to do their development project and that is a failure waiting to happen. There's need for a lot of developmental funds to be pumped into the development sector and mortgage penetration needs to go up so that the end users are able to afford these houses. Or I must say a very big thank you to you. Time is never your friend that will be having trouble when you're discussing certain issues. My guess has been a lot of trouble although he is a real estate investment agent. Many thanks for all the useful insights that you have shared on the show for today. Thank you, Justin. It is indeed my pleasure. And that's the size of the show for today's business insights will return to your screen tomorrow. Many thanks for being a part of it. Bye for now.