Determinants of Housing Demand

Aderamo and Ayobolu (2010) stated that urbanization has been a common feature of cities of developing world since the last century. This according to them has been in form of rapid population growth and physical expansion of cities. That the sheer migration of able – bodied young men and women from rural areas to cities have had profound impact on the city. However, the increase in the rate of urbanization and growth in the number of cities are both alarming and scaring thereby resulting to inadequate provision of basic facilities and services which housing is one of them.

 

Albeti et al (2001) asserted that urbanization being twentieth century demographic phenomena, more and more people are changing residence from rural to urban areas. They argued that increasing proportion of the population prefer large cities, big towns and a nearby administrative capitals. They stated that growth of an urban centre can take place in different forms: by growth of the existing urban localities, by classification of cities (from rural to urban) and annexations of new territory to existing cities. They opined that other main factor which determines the growth of an urban centre is the demographic change. He stressed that, this demographic change results to high housing demand.

 

Aluko (2010) quoted that, the result of the uncontrolled population growth in the urban areas are characterized by inadequate housing, the growth of slums, traffic congestion, poor waste disposal, shortage of water and inadequate power supply. In addition, the cities face problems of fragmented administration, insufficient coordination in planning and in allocation. Jiboye (2011) noted that the global urban population has quadrupled since 1950’s, and cities of the developing world now account for 90% of the world’s urban growth. The population estimate indicates that at a certain point in 2007, the world’s urban population would equal the world’s rural population for the first time in history. The growth in urban population will continue to rise, projected to reach almost 5 billion in 2030. Much of this urbanization is predicted to take place in the developing world, with Asia and Africa having the largest urban populations. Current reports also indicate that more than half of the world’s population now lives in urban areas, and by the year 2050, 70% will be city dwellers, with cities in Asia and Africa registering the biggest growth. Consequently, urban population is anticipated to grow on an average of 2.3% per year in the developing world between 2000 and 2030. He stated that the rapid urbanization and poor economic growth have compounded the problem of inadequate housing in Nigeria and that the reality of this situation is that existing housing stocks are inadequate to cater for the increasing population.

 

(Moser and Satterthwaite, 1985) stated that the rapid growth in cities has been accompanied by a rapid growth of urban inhabitants who live in sub – standard and overcrowded conditions. According to them, the figures from developing countries show that town dwellers represent an average of 30 – 60 % of the urban population. At present, it is estimated that over 50% of the urban population live in extreme poverty, with this figure rising to high as 79% in some cities. Half of the current urban population is of low – income and over a billion urban dwellers have been counted among the urban poor. He explored that majority of low income groups reside in slum areas due to poverty and partly as a result of low education achievement that cannot enable them to obtain high income jobs. Abiodun (1992) affirmed that since the end of the World War II urbanization in developing countries has accelerated greatly, with an increasing proportion of the urban population in each country concentrating in the large urban agglomerations. According to him, Nigeria has been no exception, since the turn of the twentieth century example of Lagos as having grown phenomenally, both demographically and in spatial terms. Pre – colonial Lagos originated as the only natural break for about 2,500 km along the West African coast, it became an important slave – exporting port in the eighteenth century. With a population of about 25,000 in 1866, Lagos was one of the smaller settlements in Nigeria, to compare with the largest being Sokoto with a population of 120,000. According to him, the population of Lagos increased due to earlier refuges from slavery and war in the interior, freed slaves from Brazil, and later the arrival of colonial administrators and traders that settled in the port. Therefore it increased by 40,000 in 1901 and 74,000 in 1911. In 1963 it had reached 665,000, covering 69.9km2.The provisional results of the 1991 census, gave Lagos metropolis a population of 5.3 million or 93% of the total population of Lagos State. He said that one of the problems facing Lagos is housing that the considerable gap between supply and demand has found expression in the astronomical cost of rented dwellings. Overcrowding, slums, and substandard housing are expression of this problem.

 

Ademiluyi (2010) observed that despite many interventions and efforts by the governments, actual achievement in terms of providing adequate housing in the country remain essentially minimal for a number of reasons; which include:

(a)    Problem of plan implementation. There is often a wide gap between what is on paper and what is happening on the ground. For example, only 13.3% achievement was recorded in the Federal Government housing programme in the third National Development Plan.

(b)   Lack of adequate data relating to the magnitude of the problem, due to partly the absence of the national data bank on housing.

(c)    Inconsistency in government policies and programmes, including frequent changes of policies with changes of government and without proper assessment of the existing ones.

(d)   Lack of efficient and sustainable credit delivery to the housing sector.

(e)    People’s incomes are relatively low in comparison with house market prices, resulting in an affordability problem.

(f)    High cost of building materials.

(g)   The rapid annual growth rate of the Nigerian population, which was estimated at 3.3% on the basis of annual birth rate of 49.3 per 1,000. Coupled with the rapid population growth/urbanization is the problem of an increasing poverty level among the citizenry, which has risen from 65% in 1996 to about 70% in 2007, according to UNDP and World Bank estimates.

(h)   Lack of effective coordination among Housing Agencies. While all tiers of the government are involved in one way or the other in housing matters, but their activities are hardly coordinated.

(i)     Politicization of housing issues.

 

Igwe-kalu and Chima (2006) they observed that housing demand have advanced from mere place of rest and shelter to a place of comfort, leisure, a commodity, an investment a symbol of wealth, they identified the factors that influence housing demand as follows: - (a) the quantity of housing available (b) the quality of the houses available. (c) the distribution of the available housing stock. (d) Inadequate infrastructure (e) inadequate maintenance (f) affordability (g) sanitary condition (h) inadequate maintenance (i) Hazards.

 

      Variation of Housing Demand among Income Groups

According to him the existing housing shortage, which is the main problem of the city, is created as a result of rapid population growth rate and insufficient housing supply to satisfy the newly formed households. The continuously growing backlog housing need leaves about 25% of the city’s population to live in overcrowded dwellings. In 2004 about 65.7% of the residents were affected by housing deficit as a result of insufficient housing in quantity and quality terms. Housing crisis of the city highly affects the low-income group which accounts more than 90 % of the city’s population.

 

Jiang (2006) defined housing condition according to the nature of housing availability, affordability and qualitative aspects of the neighbourhood environment. According to him, choice of the housing quality indicators is often context-dependent and varies over time. Moreover, he also affirmed that the use of the housing indicators is often affected by data availability. For example, to measure the prevalence of slums in developing countries, according to him the UN-HABITAT (2003) adopted five indicators in its statistical report, which include access to improved water, improved sanitation, sufficient living space, improved durable housing and secure tenure.