FORCES OF DEMAND AND SUPPLY AS IT AFFECT THE PROVISION OF RESIDENTIAL PROPERTIES IN AN URBAN AREA.
FORCES OF DEMAND AND SUPPLY AS IT AFFECT THE PROVISION OF RESIDENTIAL PROPERTIES IN AN URBAN AREA.
The issues that motivated this demand and housing supply analysis include a lack of housing units, overcrowding, excessive rents, delays in plan approvals, inadequate housing, and unsanitary residential settings. Among other things, the goals were to analyse the private sector's contribution to effective housing supply in Abeokuta.
The rents of houses, the cost of building construction, and the cost of land are major drivers of the supply of housing in Abeokuta. Data were acquired from users of currently available housing units in the research region.
The approach of random sampling was used. According to the findings, the actual essential elements influencing private sector housing supply in Abeokuta include the cost of home production, the cost of land, housing rents, and urban inhabitants' per capita income.
Based on the foregoing, a number of recommendations were made, including: subsidising the cost of building plots, reducing delays in plan approvals, increasing government participation in the housing sector,
controlling the price of houses as well as rents, and forming housing co-operative societies to enable more urban residents to have the financial resources to own their own houses.
1.0 INTRODUCTION TO THE STUDY AND BACKGROUND
Housing has long been recognised as one of the most basic need for human survival. Housing influences not only a man's social standing, but also that of a nation and a society (Eni, 1998; Ezirim, 2005).
Furthermore, housing reflects a nation's economic position because it is closely tied to man's wellbeing and prosperity. A housing market is where supply and demand for housing meet.
The housing market, according to Bourne (1981), is a system of institutions and procedures that bring together housing supply and demand, that is, buyers and sellers, renters and landlords,
builders and consumers, with the goal of trading dwellings and housing services as resources. It investigates in depth the current and future patterns in the supply and demand for housing in a certain area.
Essentially, housing market assessments analyse supply and demand elements as well as demands, and then design methods and processes to suit those needs. The housing market, unlike other forms of marketplaces, has a variety of distinguishing features.
It deals with the exchange of rights and property and is, for the most part, stationary. There is no distinct market area for exchanges between buyers and sellers in the home industry. Surprisingly, transactions can even take place over the phone.
The public sector housing market and the private sector housing market are two separate types of housing markets. Individuals and business organisations make up the private sector's participation in housing delivery.
The sector provides housing for direct use by its employees as well as for rental or outright sale to the general public. Without a doubt, the private sector has been more efficient and reliable in housing production than the state sector.
According to Henshaw (2010) and Danson (2011), the housing market is divided into three types based on tenure: private owner occupier, private leased lodging, and public sector housing.
Income, type of structure, forms of rights or tenure, price or rental value, quality, size of household or social class are some of the key characteristics of the housing market (Agbola and Olatubara, 2007).
The National Housing Policy (2004) vividly captures the role and contribution of the private sector in housing provision. The following are the functions of the private sector as defined in the document:
Participate completely in housing delivery, especially in terms of adherence to the provisions of the Employees Housing Scheme (Special Provisions) Act (Cap 107).
Create primary mortgage institutions, building societies, thrift and credit organisations, and so on.
Participate in the creation of estates and houses for sale, rent, or shared ownership.
Cooperate with the federal, state, and local governments, as well as any other government agency, in the supply of housing and economic growth.
In accordance with the aforementioned functions and objectives, the private sector has regularly provided more than 90% of Nigeria's housing stock (FGN, 2002). Furthermore, by 2010, it was claimed that the private sector housing supplied approximately 98% of the country's current housing units (Mofinews, 2010).
According to the 2006 Population Census in Calabar, the private sector housing sector contributed around 86,966 or 92.9 percent, while the public housing sector provided only 5,625 or 6.0 percent. Without a doubt, housing in Calabar is driven by the private sector.
However, the private sector has failed to offer public housing that is affordable. Affordability, end-user-driven, and value management (cost reduction) are crucial factors missing in private-sector efforts. The housing units created by the industry are typically out of reach for low-income families.
This research focuses on the private sector housing supply in Calabar. It has been noticed that the population of many cities, particularly in developing countries, grows without a comparable rise in housing availability.
According to Nubi (2002), “in Nigeria, the supply of new housing has not been able to match the demand…” The implications of this development are numerous, including high occupancy ratios, high rental accommodation costs, and the rise of dilapidated and devastated urbanscapes. 2007 (Jacob and Ofem).
1.2 STATEMENT OF THE PROBLEM
There is a significant discrepancy between housing demand and supply. This is primarily due to the sluggish reaction of supply to demand. The housing market frequently suffers from supply adjustment lags.
(1972, Rothenberg and Edel). If the households with inadequate housing were willing and able to pay for improved housing, the supply side response could take a long time. This is mostly because it takes a long time to develop new residences in response to new demand.
This is because housing supply is fixed in the short term, and a rise in housing demand raises the long-run equilibrium price (Agbola and Adegoke, 2007). This invariably causes suppliers to respond to market price increases by raising the quantity of dwellings supplied.
Housing supply naturally responds slowly to new demand, with the minimal time required to mobilise the necessary resources to start and construct new buildings.
Okpala (1981) agrees and concludes that, while the rate of housing building has increased and continues to increase, it is still not close to satisfying present demand, let alone the additional demands caused by continued urban population growth.
The failure of the private sector to house a larger proportion of the population, particularly the poor, prompted the option of direct state housing distribution.
This is primarily to expand housing supply and provide assistance, particularly to the low-income segment. However, the price of a dwelling unit has always been a primary predictor of its affordability.
Most housing units are priced much beyond the financial capacity of the target demographic due to a mix of issues such as corruption and inefficiency in public housing delivery.
Furthermore, according to Mabogunje, Harday, and Mistra (1978), even when subsidised, the method of direct government construction of houses resulted in a product priced considerably beyond the purchasing capacity of the majority of urban dwellers.
1.3 GOAL AND OBJECTIVES
The study's goal is to look at the demand and supply for residential housing in Ogun State's urban districts, with a focus on Abeokuta as a case study.
The following goals were set in order to attain the aforementioned goal:
To examine the public and private sectors' contributions to home supply in Abeokuta.
To investigate the factors influencing private sector housing supply in the study area.
To give proposals to assist ease Abeokuta's housing supply concerns.
1.4 RESEARCH METHODOLOGY
The data for the study will be gathered from both primary and secondary sources. Primary sources include administering a well-structured questionnaire, conducting interviews with respondents, and personally seeing the research. Meanwhile, secondary data will be gathered from academic and professional journals, the internet, textbooks, and other sources.
1.5 STUDY OBJECTIVES
The research focuses on the concerns and challenges surrounding the supply and demand for residential housing units in Ogun State. As a result, the study is limited to the Abeokuta metropolitan, which is the primary urban centre in Ogun State. It is also the seat of power for all of the state's Local Government Areas.
1.6 THE SIGNIFICANCE OF THE STUDY
Existing literature exists on the challenges associated in the demand and supply of residential housing in urban Ogun. Meanwhile, this research is being carried out in order to benefit the following groups:
It will benefit the general public, i.e. housing unit users, because they will have sufficient information on the issues and obstacles involved with the delivery of housing units by both the government and commercial developers.
It would be useful to Estate Surveying and Valuation firms in Lagos as they begin to figure out the methods for ensuring that the National Housing Policy objectives are adequately implemented by the government.
It will also be valuable to students undertaking research on issues involving the demand and supply of residential dwelling units as a research resource for further study.
1.7 limitations OF THE STUDY
In a study of this sort, one is certain to confront a number of challenges in obtaining the required data that would satisfy the expected standard. Of course, the research includes the use of both primary and secondary data,
and some problems were encountered. Financial and time restrictions are among them. Another major issue that cannot be overstated is the high expense of transportation incurred during data collecting.
1.8 DEFINITIONS OF TERMS
1.8.1 LIVING SPACE:
Housing is defined literally as structures or other shelters in which people live, a place to live, a residence, and a crucial component in the social and economic fabric of nations.
Housing is one of the most fundamental human requirements. Housing implies shelter to most people, but it means more to others because it is one of the best predictors of a person's standard of life.
his or her social standing (Nubi, 2008). It is a priority for achieving a decent standard of living, and it is crucial in both rural and urban regions.
1.8.2 AVAILABILITY AND DEMAND:
In microeconomics, supply and demand is an economic model of market price determination. It concludes that in a competitive market, the unit price for a specific good or other traded item, such as labour or liquid financial assets,
will fluctuate until it reaches a point where the quantity demanded (at the current price) equals the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.