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Cash & carry financing, bane of Nigeria’s housing policy , Developer

By  Yinka Kolawole

The failure of the housing policies of successive governments in Nigeria to effectively address the chronic shortage of affordable housing in the country has been attributed to the culture of cash and carry financing in the real estate industry.

A property developer, Dr. Victor Onukwugha, stated this recently at an interactive session, where he noted that so-called low income houses built purposely for low income earners end up being highjacked by the rich who could afford to buy them on cash and carry basis. “What we are developing here is the cash and carry system so that even if you build houses for low income earners they end up in the hands of the rich people.

“The government cannot do it alone the private sector that should team up with the government to do it finds it difficult because our banks are not doing banking they are not lending because a situation where the banks want to lend you and they are treating you like the construction companies _ as if they are issuing trade finance _ they want to give you money for 90 or 120 days it will not work. The tenor is too short, the interest rate is too high such that even if you borrow as a developer you must of course pass on the cost to the end buyer,” he said.

Onukwugha, who is the Executive Chairman of Bahaus International Limited, said that government should provide all necessary assistance for proper housing finance, as it is done all over the world where various forms of assistance are extended to the low income group.

“It may not just be mortgage, for example government can buy up property from the developer and subsidize them for the low income earners. If you go to London, you have town council flats because the cost of building anywhere is high.

You can say that because you are building for the poor man, if you are selling cement for N1,500 per bag they should sell it to you for N700. So it has to do with subsidy for it to be cheap and affordable. Affordable housing doesn’t mean that it has to be cheap and all that.

The policy drive is to see that you encourage the private sector to have access to long_term funds so that they can churn them out and also to make mortgage available so that they can be bought,” he remarked.

The developer asserted that two types of housing finance are required in radically tackling the about 16 million units housing deficit in the country. “One is the construction loan or financing which should go to the real estate developers to access and use it to construct houses.

The other is the mortgage finance which should go to the end users – the buyers – for them to purchase the houses. If you do not have proper mortgage system, then even when the construction loan is there, people will be building houses and yet there will be nobody to buy them. But if you have efficient mortgage system even developers will have the need to develop because they know that at the end of it the houses will be utilized,” he declared.

Onukwugha noted that his company has been involved in residential, commercial and industrial real estate development over the years and recently executed some model housing estates in some parts of the country. He added that they are set to develop another housing estate in Abuja called the Rockview Garden at Apo District to be made up of 594 housing units with modern infrastructure.


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