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…Citizens decry cash strain, policy pain
By Maduka Nweke
For many Nigerians, owning a home is a dream that may never come true. It remains in the realm of self-titillation. Between rising building costs, scarce cash and confusing government policies, the path to homeownership now feels more like a marathon through quicksand than a milestone of success.
Those who spoke to Daily Sun believe Nigeria’s harsh economic realities make homeownership an uphill task for young people. They argue that with widespread unemployment and instability even among the employed, saving for such a major project is almost impossible. Many barely earn enough to feed themselves, let alone set aside funds for a house.
According to them, building wealth and owning a home now require a dual approach of disciplined saving and smart investment. This means boosting income, budgeting wisely, and leveraging real estate as an investment tool, since saving alone can no longer keep pace with soaring property prices.
According to Chief Innocent Merckson Okoro, Principal Partner MI Okoro and Associates, investing your money allows it to grow faster, helping one to reach his homeownership goal. For those who want to use real estate itself as a wealth-building tool, there are options that can help one purchase his dream home later. Once you have built up significant savings and wealth, you can take the steps toward homeownership. He noted that to build such savings, you must know your level more so as the cost of commodities in the market is not helping matters. The moment you need an article today, if you have money you buy it, if you fail to buy it and hold your money inflation will finish it.
Why building wealth matters
In Nigeria, inflation and currency devaluation can quickly erode savings. This is more reason one should think well before making building investments. Starting early allows you to harness the power of compounding to be able to invest and save regularly. A saving of N100,000 at an early age of 25 can help you grow your wealth to over N1.6 million by age 45, whereas waiting until 35 requires N400,000 to reach the same goal. Investing early gives your money more time to grow.
Budgeting and saving
According to experts, to budget and save for a home, you must first create a detailed budget that targets a down payment and closing costs, then employ disciplined saving strategies and improve your financial standing to prepare for a mortgage. Adopt a budget like the modified 60/20/20 rule, where 60 per cent covers living costs, 20 per cent goes to savings and investments, and 20 per cent funds education and self-improvement. Automate transfers to your investment account so you never miss a payment. Build an emergency fund that can cover 3–6 months of living expenses; money market funds currently return around 16–18 per cent. But in all, stable income generation matters because it is only when you are alive that you talk of budgeting and investments.
Avoid high-interest debt
Speaking on saving for homeownership, Chief Sam Willy Ndata, a Stockbroker and doyen of the Capital Market said, to eliminate high-interest debt, you can use one of several strategies to reduce the total amount of interest you pay, consolidate multiple payments, and stay motivated. “Popular methods include the debt avalanche and debt snowball, as well as refinancing options like balance transfers and personal loans. Interest rates on consumer loans in Nigeria can exceed 25 per cent. According to Cowrywise, any debt above 25 per cent should be repaid quickly. Reducing high-interest debt frees up cash for productive investments. This is done before choosing a strategy so that you can gather all your high-interest debt information that includes total balance owed on each account, interest rate (APR) for each account, minimum monthly payment for each account , then create a budget to identify how much money you can allocate to debt repayment beyond the minimum payments. This extra amount is your key tool for speeding up the process. To invest in property now especially in urban areas is like plotting to kill an elephant because it is common to rent a two-bedroom flat now in the rural part of Lagos goes above N1,000,000 million. For you to build your own house you will have to consider government policies and ‘Omoniles’ and other things involved.
Diversify your investments
He noted that one must spread one’s investments across different asset classes like the money market or mutual funds for stability, stocks for growth, bonds for fixed income, and real estate for capital appreciation. Money market funds in Nigeria typically yield 16–18 per cent, equities have delivered 22–25 per cent on average, government bonds return around 13–15 per cent, and well‑located real estate can provide rental yields of 8‑15 per cent. Real estate also serves as an inflation hedge and multiple income streams: think of land flipping where plots in Epe that sold for N600,000 in 2021 now sell for over N2.5 million. Consider diversified options like Real Estate Investment Trusts (REITs) which allow you to own shares in professionally managed property portfolios from as little as N10,000. For direct ownership, estates such as Royal Estate and Amen Estate offer secure gated communities with modern infrastructure and strong rental demand,” he stated.
