FG unveils plans to unlock N1trn retail mortgage market

The Federal Government on Thursday unveiled plans which it said would unlock investment and development opportunities in the Nigerian retail mortgage market with an estimated potential value of N1 trillion.
Kemi Adeosun,  minister of finance, who spoke at the ongoing African Union for Housing Finance (AUHF) conference in Abuja, explained that the government was already at an advanced stage of the development of a housing finance initiative that will aim at providing approximately 300,000 affordable homes supported by mortgages, and that this, in turn, would create an estimated 700,000 new jobs across a range of disciplines and professions.
Adeosun said the property development plans will encourage a culture where first time buyers will develop an appetite for saving to own their homes through mortgages.
“Retail mortgages will provide a long term source of revenue to our pension funds and other investors, and will at the same time increase land values and create a new generation of home owners. It is potentially a N1 trillion market that will drive value in our economy,” she said.
Speaking through Seye Senfuye, her representative at the event, Adeosun expressed confidence that the initiative would succeed because the yearnings of Nigerians to become home owners of quality properties would drive the much needed change agenda of the Muhammadu Buhari administration.
“We have carefully analysed factors that make cost of living high for people and are designing specific strategies to address them.
“Our solutions will encourage home ownership through affordable mortgages for quality homes, a mortgage system that will catalyze development of mortgage market in Nigeria with the provision of single digit interest rates and longer repayment periods of up to 20 years,” the minister stressed.
This is because of what she called the recognition that the nation’s current mortgage system has a very low rate of penetration of only 1 percent as against 6 percent in India and 30 percent in South Africa.
According to her, the most important reform will be behavioural, as home owners commit to the long term nature of mortgage payment, even as we see a future Nigeria where an average working family lives in their own home that they can finance over time and can meet the high standards that Nigerians desire and deserve.

 

YANGE IKYAA