For the first time in the history of housing development and finance in Nigeria property market, developers and mortgage banks are coming together to provide housing stock and loan facility with the aim of making houses affordable for buyers.
The Nigerian housing market is one in which annual rent for a three-bedroom apartment, for instance, is as high as USD200,000 which is enough to buy same size apartment in South Africa with a mortgage facility which interest rate is lower than Nigeria’s lowest at 6 percent (NHF rate).
The ‘consortium’ which comprises three mortgage banks including Imperial Homes Mortgage Bank, Trustbond Mortgage Bank Plc and Homebase Mortgage Bank Limited, and three developers including Gran Imperio Group, Ocean Springs Estate Limited and Vestril, say they have mobilized to site intent on delivering a large number of houses, stressing that they are making progress in the field where the houses are being built.
At a press conference jointly addressed by the MDs/CEOs of the partnering companies, Adeyeye Ogunwusi, Gran Imperio MD, explained that “what we want to achieve with this partnership is a large stock of houses which mortgage banks can leverage to create products.
Ogunwusi who represented the developers added, “we are delighted and excited to be part of this consortium because in unity we can achieve a lot; we cannot do it alone as developers and it interesting that, for the first time, mortgage banks are coming together to support developers”.
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He revealed that a special purpose vehicle (SPV) known as Grand Lake SPV Limited has been put in place to drive the development of the Grand Lake Estate which holds promise for about 5,000 housing units to be built on about one million square metres.
Ben Akaneme, the MD/CEO of Imperial Homes, assured that these houses would be provided at affordable prices, pointing however, that affordability did not consist in just the pricing of the housing, but in the structure of the finance with which to buy the houses.
“Homebase Mortgages membership of this group is quite strategic because Femi Johnson, the MD/CEO of this bank is the president of Mortgage Banking Association of Nigeria (MBAN) and also a director in the Nigeria Mortgage Refinance Company (NMRC)”, he said, saying it would help the partnership.
Johnson described the partnership as a good beginning, pointing out that it was one of the partnerships that would define Nigerian economy going into the future because “here we are talking about land of almost a million square metres and houses that will be on it will be about 5,000 units”.
“We have the weight of the entire mortgage banking sector behind this partnership; we also have the weight of the NMRC behind it. We have introduced some standards into the sector and so, we have uniform offer letter for people and also uniform underwriting standard and we are working closer and better as a group of mortgage operators and this is going to enhance all of that”, he assured.
Adeniyi Akinlusi, the MD/CEO of Trustbond Mortgages, noted that the major problem facing Nigeria was the housing deficit which is about 17 million units, describing it as a task too big for one mortgage bank or even two mortgage banks to undertake, hence the partnership.
According to him, the more the number of Nigerians that own their own homes, the better for capital formation, for investment and for the economy, hoping that “it is from here that we can see our economy grow.
and to make it easy for those who will coming to subscribe to Grand Lake, the three mortgage banks are to harmonise their lending terms so that whichever one of them a subscriber goes to, the lending rate will be the same”.
CHUKA UROKO
