By Ikenna Asomba
Real estate stakeholders have advised the President-elect, Maj-Gen. Muhammadu Buhari to get a competent team that will hit the ground running, and as well as channel efforts towards addressing the housing deficit in Nigeria. They noted that by building 500 houses in each of the 36 States, the incoming Buhari administration can create over one million jobs in Nigeria.
The stakeholders spoke last Wednesday at a Business Forum tagged Real Estate Financing in Nigeria: Modalities, Opportunities and Challenges organised by the International Real Estate Federation, FIABCI, Nigeria Chapter in Lagos.
The real estate professionals were worried that foreign investors are now the major players in the housing sub-sector, while local players seem to be on the losing end, a trend they attributed to the unavailability of funds to the local players.
Following a recent forecast by the International Monetary Fund, IMF that 70 percent of the world’s growth will come from the emerging economies like Nigeria, these housing experts, recommended ways the incoming administration can harness the great investment opportunities available in the sector, as well as provide an alternative means of financing apart from the traditional bank loans which have become rather discouraging.
Alternative means of financing
Those who spoke at the event included former President FIABCI-Nigeria and World Vice President Africa-FIABCI, Mr. S.P.O Fortune Ebie; President FIABCI-Nigeria, Mr. Joseph Akhigbe; Head, Real Estate Finance (West Africa) Stanbic IBTC Capital, Mr. Adeniyi Adeleye and the Managing Director/Chief Executive Officer, Crown Realities Plc, Mr. Darl Uzu and the Managing Director, FSDH Asset Management Limited; Fund Manager, Africa Capital Alliance, Mr. Obi Nwogugu.
Policy somersault: According to Nwogugu, the major issue that has led to the increasing housing deficit in Nigeria is policy somersault by successive administrations. He said, this issue discourages real estate investors from dealing with governments in addressing the huge housing deficit in the country.
His words: “As real estate investors, there are a lot risks that come with dealing with government. By the time you are dealing with this government, when another one comes on board, you lose out. So, real estate investors now believe that the less you deal with government, the better for you. Again, today, the supply of residential housing in Nigeria is not growing because it’s difficult to finance and buy it. If you have mortgages in this country, more people can afford to buy houses. The fact that on the buyer’s side, you have to save money for 20 years before you can afford to buy a house is a problem on its own. Why can’t one go to a bank and get a real mortgage that he can pay over 20 years, without paying 25 per cent every year? But this is not working at the moment. Until there is a real mortgage system in Nigeria, things will remain the same.”
Proffering a solution, he advised the incoming administration to support the National Mortgage Refinance Company, NMRC, to allow banks create mortgages that are more competitive. “It may not be single digit, but at least let it be better than what we have today. So any policy that will expand the pool of mortgage holders will certainly turn the tide of housing deficit in the country,” he said.
Viable mortgage: Similarly, Mr. Fortune-Ebie, who is the pioneer Managing Director of the Federal Housing Authority, FHA, advised the Buhari administration to make funds available in order to subsidise mortgages as well as making land titles available to the people.
The most important thing to do to address this alarming housing deficit in Nigeria is that government must make funds available. Whoever is telling government that housing is not subsidised is a liar. Even recently in the United Kingdom, the Prime Minister has worked out a scheme for new house owners with subsidies for students to become new house owners. But here that we practice voodoo economics, the President is told that housing is not subsidised. All over the world, housing is subsidised.
Secondly, the question of title to land must be concluded and land made available to people. Also, people who are experts in the built industry should be put in place in the housing sub-sector, and not charlatans. Once Buhari does these things, the housing problem in Nigeria will be solved.”Ebie who also managed Shelter Afrique said.
Recalling the good old days when government initiated workable schemes to address the housing deficit in the country, Ebie said: “ I owned my first house at about the age of 32.