As the Central Bank of Nigeria (CBN) is figuring out the modalities to make funding housing and mortgage developments a reality, stakeholders in the sector are already strategising on necessary measures to be put in place to make the apex bank’s intention impactful.
Part of the measures they are urgently seeking include industry standardisation and amendments of housing and mortgage related laws, among others, to fully drive home ownership among Nigerians.
Speaking through the Festus Adebayo-led Housing Development Advocacy Network (HDAN), on a social media platform, the professionals, which comprised real estate developers, mortgage lenders, built environment professionals and other service providers, said there was need to standardise housing construction delivery to clean up the space of ‘fly by night’ developers that do not operate with an impact mindset.
During the discourse, they urged CBN not to overlook the essential linkages between consumer financing and housing finance, adding that most consumer financing needed to rest on the availability of affordable housing ownership or rental to substantially deepen the space.
“The linkage is important because most financial institutions are largely concerned with reaping the short term benefits of retail consumer financing without deepening or creating a stabilised base through homeownership,” the experts said.
The Central Bank of Nigeria had disclosed its intention to create a fund for developers in the real estate sector, who have the capacity to repay as at when due.
The intention of the apex bank was contained in a letter by the CBN’s Governor, Mr. Godwin Emefiele, titled “Turning the Covid-19 tragedy into a new opportunity for Nigeria.”
While the modalities of the funding option are still being figured out, the CBN governor said the the apex bank would work with deposit money banks to identify potential/eligible off-takers.
The CBN intends to verify the financial capacities of potential off-takers before any loan can be given to them.
The apex bank also disclosed that efforts were underway to provide assistance to the mortgage finance sub-sector in order to encourage its optimal performance.
Commenting, Executive Secretary, Association of Housing Corporations of Nigeria, Toye Eniola, stated that any intervention without consideration for social and rental housing for the low income group that constitutes the largest percentage of people, who required housing, would defeat the purpose of CBN’s intervention.
To ensure the success of the intervention, he pointed out that stakeholders would need articulated offtakers data base to truly identify those who genuinely need housing with capability to drive and match demand with supply “especially from the organized public and private sectors.”
He said: “This is an area that requires serious attention if we expect to get anything from CBN.”
Affordable housing professional, Mrs F. Bamidele, an architect, pointed out that industry standardisation had become imperative to truly achieve affordable housing in a sustainable way.
She said: “This can be addressed under the third area of CBN intervention, that is, Institutional capacity,” adding that institutional capacity remained one of the major pillars supporting affordable housing structure and “one of the building blocks of this pillar is industry standardization.”.
Talking about industry standardisation, she said it comprised policy standardisation, design standardisation and component standardisation, among others.
“All these will help to address major issues inhibiting the COVID-19 campaign. The time to begin to focus on this is now,” she said.
Bamidele also identified absence of a social housing/rental charter that would standardise and guide the sector activities as another challenge that must be addressed.
“This, of course, will highlight another sore area, dearth of database,”she said.
A former General Manager, Aso Savings and Loans, Mr. Fonahanmi Idris, said that CBN’s intervention had provided an opportunity for players to itemise all the housing and mortgage related laws that require amendments including the CBN Act, Land Use Act, among others.
Idris also said that bank’s high rates were not complimentary.
He said: “The “Real” in estate is to show the importance of the sector to the growth and development of the economy.”
To benefit from the CBN intervention, he advised that track records of developers were important as well as the capacity/capabilities of the mortgage banks.
The apex bank said it would work with state government to ensure that the processes of issuing land titles become faster and less cumbersome, reduce the cost of land documentation, and ensure investment-friendly foreclosure laws