The 2024 Piggyvest Savings Report revealed a notable shift in Nigerians’ financial priorities. Housing dropped in both the ranking of major expenses and as a top savings goal in this year’s report. While housing remains a critical consideration, it has fallen below other pressing financial commitments in both categories. This change marks a reordering of priorities that reflects the economic realities many Nigerians face today.
Housing Slips in Expense Rankings
One key finding from the Piggyvest 2024 Savings Report, is that housing expenses are no longer as prominent as in previous years. In the 2024 report, housing ranks sixth among personal expenses, dropping two spots from the previous year. Only 23% of Nigerians are now saving for housing, compared to 39% in 2023.
This shift may reflect broader economic pressures, including inflation, which has driven up costs of essential items like food. As a result, many Nigerians are redirecting a larger portion of their income toward daily necessities, which now take priority over housing in their budgets.
Housing as a Savings Goal: Still Important, but Less Urgent
Interestingly, only 23% of Nigerians are saving specifically for housing or rent in 2024, according to the report. This marks a significant decline from last year when housing ranked first in Nigerians’ savings goals, with 36% of individuals prioritizing it. In this year’s findings, housing now ranks fourth, falling behind goals such as building an emergency fund, starting or growing a business, and supporting children’s upkeep.
This shift suggests that Nigerians are reprioritizing their financial goals in response to rising living costs. As housing becomes less attainable due to escalating property prices and economic challenges, it appears that many are adjusting their focus to more urgent or accessible needs. Housing may now be viewed more as a long-term aspiration, with immediate financial priorities taking precedence.
Read More: Bridging the Housing Gap: Why Nigeria Desperately Needs More Affordable Homes
Factors Behind the Shift
Several factors likely explain this decline in housing as both an expense and savings priority:
- Increased Cost of Living: Inflation has raised the cost of basic needs such as food, transportation, healthcare, and utilities, which are unavoidable and immediate expenses. As these essentials consume more of household budgets, less is available for savings toward long-term goals like housing.
- Economic Uncertainty: Economic factors, including fluctuations in the naira’s value, have led Nigerians to adopt a more cautious financial approach. With incomes strained, individuals are prioritizing short-term financial security and liquid savings (e.g., emergency funds) over commitments like properties or rental expenses.
- Higher Interest Rates and Loan Accessibility: Rising interest rates in Nigeria have made borrowing for housing more expensive, thereby increasing the barrier to homeownership. Many potential homeowners are reconsidering or delaying property investments due to the higher cost of financing real estate.
- Shifts in Lifestyle Preferences: The younger generation, in particular, are prioritizing mobility and flexibility over the long-term financial commitment of owning property.
- Limited Access to Affordable Housing: The lack of affordable housing options has made homeownership increasingly unattainable. Many individuals and families are finding it difficult to save for a home as property prices outpace income growth, shifting their focus to more immediate financial needs.
- Alternative Savings and Investment Options: The rise of investment platforms and fintech products in Nigeria has provided more accessible opportunities for people to grow their wealth outside of real estate. Nigerians are increasingly diversifying their savings into stocks, mutual funds, and other financial assets that are more accessible, and liquid compared to real estate.
Read More: How is rising interest rate affecting residential tenants in Lagos
What This Means for the Future of Housing in Nigeria
This shift could have broader implications for the Nigerian housing market. With housing costs no longer a top priority for as many Nigerians, demand in certain rental or ownership markets could experience fluctuations. Therefore, financial institutions and policymakers could see this as an opportunity to address housing affordability, as the report indicates a growing gap between the financial capacity of Nigerians and the cost of housing.
Read More: The Role of the Nigerian Government and Private Sector in Affordable Housing
Conclusion
The Piggyvest findings provide valuable insight into how Nigerians are adapting to today’s economic conditions. With housing dropping as a top expense and savings goal, it’s clear that Nigerians are making strategic financial decisions to cope with a challenging economic environment.
By focusing on day-to-day needs, they are adapting to a period of economic constraint with an eye on flexibility and resilience, prioritizing what they need now to protect their financial health in the future.
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