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1.0 General Introduction

The country’s housing delivery system is made up of several interconnected components, including land, building materials, infrastructure, legislation, building standards, and, most crucially, funding. The importance of housing is enormous; for most governments,

the availability of adequate but basic housing for all is frequently cited as a priority for strengthening society’s social demands. In Nigeria alone, there is a shortfall of 150,000 units each year (National housing strategy, 2004);

the government, with its public housing efforts, cannot address this issue, necessitating the necessity for private investors in the real estate industry.

Habitable housing benefits the population’s health, efficiency, social behaviour, and overall well-being. Apart from providing shelter and protection, housing also serves as a valuable asset.

The house is a substantial asset that adds to any ordinary home-owner’s portfolio, and for many households, the purchase of a house signifies a lifelong investment and a store of wealth.

The provision of housing services is mostly dependent on a well-functioning housing financing system. The cost and various government economic policies, which could be fiscal or monetary (Giussani and Hadjimatheou, 1991), influence the decision to build or buy a house, and it also depends on the country’s economic structure.

Housing is a large purchase that necessitates long-term financing, and the elements associated with well-functioning housing finance systems enable the supply of long-term financing.

Countries with more developed home finance systems have stronger legal rights for borrowers and lenders through collateral and bankruptcy laws, well-informed credit information systems, and a stable macroeconomic environment (Warnock 2008). These variables also help to explain differences in housing finance across emerging market nations.

1.1 Statement of the Problem

Housing provision is critical to the government’s efforts to achieve Vision 2020 and the general development of the economy. With a 150000 unit annual shortage and an ever-increasing population, a housing problem occurs, as do social and economic problems.

Housing is not the only issue here, but adequate housing that allows for the comfort levels sorted by humans. The government’s emphasis on housing issues led in the adoption of a housing policy; nevertheless, its execution and efficacy have been inadequate, as evidenced by the current state of housing in Nigeria.

According to Fallis (1994), the housing problem can be stated in terms of its causes, for example, the housing problem might be described as being caused by an underdeveloped mortgage market, which leads to the loss of simple rental housing. Various causes of housing difficulties have been identified.

The most major factor has been the disparity between the cost of habitable and adequate housing and the number of people who can afford it. Long term, market dynamics and government involvement affect the size of each housing tenure. (2008) (Warnock)

There is a significant discrepancy between the demand for and supply of house finance. To efficiently link housing financing and house delivery, a critical study and comprehensive grasp of the country’s money market and current financial structure are essential.

Many countries restrict the purchase or building of housing because individuals cannot borrow financing. The available loans are aimed at middle- and upper-income families.

The issue is how to make loanable cash available to low-income earners. Finding solutions to this challenge and putting them into action will provide appropriate affordable housing for low-income people.

The shortage of finance is due to inconsistent sources of income and low earnings from informal jobs. According to UN Habitat (2003), the informal sector, which employs the majority of the low-income population,

has not been providing consistent and sufficient income to fund costly housing construction and improvement. As a result, persons with modest incomes must save for many years if they are to realise their dream of living in a decent property.

Again, the issue is how to provide loans to low-income individuals who lack assets to act as security without risking blowing the real estate bubble. Can the current financial models support it? If that’s the case, how can we avoid a scenario like that in the United States in 2007?The mortgage crisis was caused by excessive borrowing and the idea that home prices would only rise. Prior to the mortgage crisis, banks, according to Dean Baker (2008),

provided easy access to money. Mortgages could be obtained with little or no documentation. Individuals with poor credit may also qualify as subprime borrowers. Strict measures on mortgage applications were not used as thoroughly as they could have been.

When the mortgage crisis hit, home prices began to fall, borrowers who bought more houses than they could afford stopped making mortgage payments, and monthly payments on adjustable-rate mortgages skyrocketed as interest rates rose. As a result, the banks repossessed the homes, leaving the majority of the people homeless.

A critical examination of the elements that influence home financing in the country could result in the development of models that, if well integrated into the existing financial system, could produce effective and efficient results.

1.2 Research Hypothesis

Housing delivery is controlled by variables other than demand, making it inaccessible to low-income earners.

1.3 Goals of Research

Identifying the factors influencing housing delivery.

To determine their impact on housing provision.

To investigate the characteristics of housing supply in developing economies.

To discover direct and indirect sources of home finance, as well as ways for low-income earners to obtain funds.

1.4 Research Questions

What are the primary drivers of supply and demand for loanable money for property development in Kebbi State, Nigeria?

What role do socioeconomic and financial elements, as well as government regulations, play in housing development and real estate investment?

What are the primary sources of housing finance for households, and how may low-income households access these funds?

1.5 Scope of the Study

This research focuses on Nigeria, a developing country whose built environment has been described as dynamic. This research will focus on both rural and urban locations; real estate development occurs throughout the country,

and this research will determine whether the elements that affect housing finance in one part of the country are uniform or vary from that in another.

Nigeria provides a macroeconomic and microeconomic platform that allows for a rigorous review of all aspects available in both economic settings. The influence of macroeconomic shocks on the country’s money market,

such as volatility in interest rates as a result of inflation, unemployment rate vs. employment rate, and other factors. The microeconomic environment seeks to depict households’ attitudes towards housing financing demand and supply.

The scope of this study will be limited to traditional financial institutions and households seeking loans for housing development. The study will look at how various factors influence the availability of money by lenders and the demand for cash by households. The study will also emphasise the country’s housing finance system, its peculiarities, and its role in housing delivery.

1.6 Significance of the Research

The study’s conclusions will be valuable to stakeholders and actors in the real estate market. It will be revealed that the availability of housing financing is governed not only by the interaction of supply and demand, but also by other factors such as socioeconomic factors, financial factors, and government regulations.

The study will aid individuals in making decisions and examining the many channels via which financing for housing development might be obtained.

Housing supply is regulated by supply and demand variables. Because real estate development takes time to design, permit, and build, supply is relatively inelastic. The demand for housing is reasonably predictable because it fluctuates with income level. The availability of mortgage financing is proportional to one’s income.

Mortgage financing is a critical component in increasing housing demand. According to Boleat (2008), there is a strong relationship between economic development and the size of the mortgage market. It is also necessary to identify the various financial possibilities accessible and to weigh the costs of such financing.

Various policies and methods have been implemented in Nigeria throughout the years to improve the housing delivery system and the quality of housing for the low-income population.

However, most measures implemented have been delayed and ineffectual, which could be due to a lack of funds to fund the low-income group and their access to housing finance.

As a result, the study is critical to the Nigerian housing policy formulation process since it will identify the fundamental challenges in housing finance. The study will also provide useful background information for those institutions interested in housing finance efforts in order for them to understand the types and characteristics of housing finance loan products that are required in the market.

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