Though the real estate sector ended 2019 in a negative growth territory, industry stakeholders are still optimistic that the sector could be lifted out of its present state if the right environment is created and the necessary things are done in the new year by power brokers in the sector.
Among the power brokers in the sector are the federal government, Central Bank of Nigeria (CBN), Federal Mortgage Bank of Nigeria (FMBN), and Nigerian Mortgage Refinance Company (NMRC).
According to the stakeholders, what the sector needs is the right environment and strong policies which the federal government has both the capacity and responsibility to provide. “The sector needs these two in order to attract both foreign and local investors,” said Adediji Adele, President, FIABCI-Nigeria.
Arguably, finance is the greatest challenge of the real estate sector. Lack of it and banks refusal to lend are part of the reasons for the sector’s slow growth and continuing recession.
Illiquidity and high cost of funds in the mortgage market explain why many Nigerians can neither afford nor access housing finance to buy or build their own homes. They are also part of the reasons housing deficit is high in the country at an estimated 22 million units.
“This is why the CBN, in its fiscal and monetary policies, should address issues of high interest rate on mortgage loans,” Johnson Chukwuma, a civil engineer, explained to BusinessDay on phone.
Chukwuma added that CBN should in 2020 bring to fruition the mortgage interest drawback scheme and collaborate with the bankers committee towards deepening liquidity and opportunities derivable from affordable housing and mortgage provision.
He said that the apex bank should broaden its its hand of fellowship and also extend the benefits it has accorded to commercial banks to other financial institutions, especially mortgage banks.
While acknowledging and commending the achievements of its management, the stakeholders said FMBN should do more, especially in the area of National Housing Fund (NHF) which will give more low income earning Nigerians access to affordable housing.
The apex mortgage bank should enter into partnership with other public and private institutions in the housing sector to achieve common goals. FMBN should build on the present awareness campaigns on how to access and benefit from NHF.
The pending NHF Act 2018 must involve the inputs of all stakeholders including advocacy groups just as all outstanding estate development loans must be recovered to enable the bank to provide more houses.
The bank must sustain the rent-to-own and cooperative housing schemes that were recently introduced and also collaborate with bodies such as Family Homes Funds (FHF), NMRC, Shelter Afrique and others.
Besides looking into its corporate governance issues, stakeholders also want NMRC to introduce technology and innovations into addressing Nigeria’s housing and land use laws while positioning mortgage banks and brokers for a futuristic, fast changing and customer-focused model of housing finance.
They expect the mortgage refinancing company to do this through yet to be launched Mortgage Guarantee Scheme in partnership with the Central Bank and other stakeholders.
The stakeholders also have their expectations from the federal ministry of works and housing. They expect the ministry to perfect the National Housing Programme which is expected to deliver affordable housing to Nigerians across the country’s six geopolitical zones.
They advise that rather than seeking to raise an infrastructure bond of N10 trillion to pay contractors, the government should facilitate the creation of an enabling environment for infrastructure and housing guarantees to thrive.
This, according to them, will drive investment interest in infrastructure and housing from local and foreign Investors. Nigeria’s infrastructure has the potential to match returns with risk given the country’s growing population and the desire for better and improved infrastructure and housing delivery.
The stakeholders also advise that the Minister of Works and Housing, Babatunde Fashola, should stop making controversial statements that might plunge the housing and infrastructure markets into deeper uncertainty.
“Challenging the World Bank on housing deficit figures or claiming that Nigerian roads are better than reported smacks of insincerity on the part of government and this will only lead to investors pricing our infrastructure investments with higher risk. You can’t lend money to a man whose words do not reflect the reality on ground,” said a stakeholder who did not want to be named.
CHUKA UROKO
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