Not long ago, it used to be that people would move away from their parents as young adults, perhaps rent for a few years, and then buy a property – often with a significant other. But recently, the desire of adults to get on the property ladder appears to have eroded, with a sense that there is no longer an urge to get a house to live in or to improve and sell – or ‘flip.’
Some claim that this is due to the millennial mindset of wanting to have many experiences before settling down and spending as little as possible on living expenses. The other argument is that the cost of buying a house has gone up at a rate that the average wage has not, meaning that fewer people are finding themselves with the financial stability that’s capable of purchasing and owning a property.
The housing situation across the world is very different, and yet the idea that adults want to get on the property ladder has been thrown into debate in many countries. In Nigeria, the United Kingdom, and the United States of America, we can see very different reasons why owning a property is becoming a less appealing venture.
Availability of property on the rise in Nigeria
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In Europe and North America, the age group known as the ‘Baby Boomers’, aged 65 and older, are becoming the largest age group. This, in turn, has led to a lessened demand for new housing as many elderly people move to communities to be surrounded by others of their age group and support if necessary. In Nigeria, however, the 18-to-34-year-olds are becoming the largest demographic, and they are the ones who will more likely seek housing.
However, it’s not just that the age group seeking housing is becoming the largest group; it’s also that the availability of housing for those on a lower income is relatively sparse. As the market has been controlled by its own forces, lower-cost housing has been neglected. For this to change, the government needs to step in and ensure that a venture into creating houses for low-income families is attractive for both developers and sponsors.
But, in 2017, Mr. Babatunde Fashola, the Minister of Power, Works, and Housing, declared that new houses being built would be allocated to Nigerians without any bias. Speaking in Maiduguri, Fashola stated that regardless of financial status or ethnicity, everyone in the area would be given an equal opportunity to get one of the new houses. It’s part of a nationwide effort to meet the housing needs of Nigeria’s growing population seeking houses.
In Nigeria, there is a clear desire for adults to own houses for the purposes of living, as opposed to the other venture on the property ladder of flipping. The government is heading in the right direction to making houses available to people of all economic persuasions.
Affordability the issue in the UK
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There is a very common thinking in the United Kingdom that house prices have increased by too much and are now unaffordable. People tend to have to borrow money from relatives, get grants from the government, and find any other way of just making up the cash for a deposit and surrounding fees. Despite the perceived high cost of owning a property, housing is the priority among adults in the UK.
When costs and fees become a relative non-factor, it was found that the vast majority of people in the UK would prioritize the purchase of a house or pay off of a mortgage if they had the money. In a survey of 3000 people by Betway, 58 per cent would prioritize housing if they won £1 million (₦480 million) as opposed to other debts or buying luxury items like a new car or holiday.
But, new findings have found that the affordability of houses in the UK is getting better, meaning that perhaps people who want houses don’t have to strike it rich to afford the fees involved. As found by This is Money, the affordability of housing in eight of the 11 regions of England, Scotland, and Wales has risen, with only the east, London, and south-east lowering in affordability. With affordability graded by the difference between average wage and house price, this implies that housing is more available to the many people who want to get on the property ladder.
Flipping is a less worthwhile venture in the USA
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In the United States of America, it seems that people give a huge range of reasons against owning a house – with the nation possibly still reeling from the after-effects of the United States financial crisis in 2007 that followed the housing bubble bursting. While, for the most part, consumer confidence has returned, per Wharton Knowledge, the housing market has only recovered in a few areas. Across the USA, just over one-third of homes have risen back up to their prices before the financial crisis while it could take a further seven years for everything to get back to how it was.
A popular use of housing for many in the USA was buying, improving, and then selling houses for profit. But, due to the reduced properties in need of ‘flipping’ and the increased competition in the area, profits from flipping have decreased. As noted by USA Today, from the third quarter of 2016, the return on investment dropped from 51.2 per cent to 47.7 per cent a year later.
The situation for adults is rather different when comparing these three nations. In the United Kingdom and Nigeria, adults have a clear desire to get on the property ladder, but house prices and house availability have become issues. In the USA, there has not yet been a full recovery from the market collapse, potentially leaving distrust among potential buyers.