HOUSING CRISIS CAN’T BE SOLVED BY TINKERING WITH PLANNING LAWS – BUILD MORE SOCIAL HOUSING INSTEAD

Theresa May has set out to address citizens’ anger over the lack of affordable housing, blaming councils for failing to enforce planning rules and private developers for focusing on making a profit for shareholders.

Yet her suggestion to tinker with the National Planning Policy Framework (NPPF) will keep leaders talking, rather than building – it will not resolve the nation’s housing crises. And yes, the crises are plural, not singular, depending on where you live.

The government must now step in and take the lead on housing policy and socially-focused capital investment, to provide the homes that people so desperately need.

Fundamentally, the purpose of housing – whether owned or rented – is to provide shelter from the elements: a place from which to access school, work and health care and to find privacy from the public gaze. Housing should also give people a sense of being “at home” – a place to be their authentic selves, and realise their ambitions.

For these reasons, housing is too important to be led by the private market. When the purpose of housing is to provide a profit for shareholders, it creates perverse incentives to build expensive luxury homes for the wealthy to live or invest in, or to delay construction while waiting for land values to rise (a practice known as “land banking”, identified by the prime minister in her speech).

Click here to download Abuja International Housing Show Mobile App

The other option is social housing: homes owned by local councils or housing associations, rented out at significantly less than the market rate. There needs to be a mixed housing economy, which prioritises the delivery of sustainable and properly affordable homes. But there are several steps that both government, and society at large, must take in order to get there.

Theresa May’s changes to the NPPF to ‘encourage’ building firms to get on and build homes is just one part of the puzzle (PA)

For one thing, it’s vital to change the way we talk about housing. All too often, private individuals and organisations are encouraged by government to invest in bricks and mortar, for example through the “right to buy” policy. But if government gets involved – directly building property – it’s not seen as a capital investment to benefit citizens – the nation’s “shareholders” – but as a “burden” or a “debt”, in terms of public sector borrowing.

Government should invest in capital subsidies to build social housing, in the name of the public good. The Welsh government is abolishing the right to buy in Wales, and England needs to follow suit. The policy means homes are being built with public money, then heavily discounted and sold to private landlords, who gain the uplift in value on resale as the market values rise.

There are even examples of houses bought through right to buy being let on the private market, to tenants who pay rent using a housing benefit from the government. As part of my ongoing research, I have even heard from landlords who won’t let to tenants on benefits anymore, because their mortgage company considers it too much of a risk.

Get your daily housing news on your mobile phone : Download from goggle playstore Now

All the while, the nation’s stock of affordable social homes is fast being depleted, with about 4,000 being sold each year. Borrowing rules need to be loosened, to allow councils to build social housing at really affordable rates. A tighter link to earnings – not rising property and land values – would create really affordable housing, in relation to tenants’ income.

The recent cold spell has underlined the urgent need for a rapid response, to end the growing problem of rough sleeping and homelessness. The market is partly to blame for the unacceptable rise in homelessness, alongside the government’s failure to invest in building more council housing. The impact of universal credit and benefit caps mean people cannot afford private rents in some areas, and there is not sufficient social or affordable housing to plug the gap.

The number of people sleeping rough in England has more than doubled since 2010 (Shutterstock)

The government can prevent people from having to sleep on the street, sofa-surf or engage in other forms of hidden homelessness by properly investing in health, education and social care to help keep people secure in their homes. Research has found that homeless people have many complex needs, which often require specialist support.

Another symptom of the lack of affordable homes is that only a quarter of young people today can afford to buy a house – the rest have been priced out. Many are delaying their transition into adulthood by continuing to live in their parents’ home, or sharing with others out of financial necessity when they would rather be moving into a family home with the person they love.

Both of these big social issues could be tackled with an integrated social policy with housing at its heart, and with investment by the government in building social and affordable homes. But there is also a keen need for more infrastructure and support, to help develop functional and well-connected communities.

The government recently announced a £866m investment to fund local council infrastructure schemes, but still more continued and consistent investment is needed. May’s changes to the NPPF to “encourage” building firms to get on and build homes – in addition to the funding already announced – is one part of the puzzle. But there is so much more that can and should be done.

Jo Richardson

Investments In Construction, Building Sectors Reason For Economic Recovery- Fashola

The minister of power, works and housing, Mr Babatunde Fashola, has disclosed that Nigeria recovered within one year of economic recession due to heavy investments in the construction and building sectors.

He stated this in Abuja  while declaring open a two-day workshop on ‘Construction Contracts Best Practices,’ organised by the Nigerian Institute of Quantity Surveyors (NIQS).

Fashola stated that the National Housing Programme ( NHP) of the current administration was the second in the history of Nigeria as an independent country, adding that the project has created not less than 14, 000 direct jobs and 40, 000 indirect jobs for builders, petty traders, food vendors and among others.

The minister described the construction sector as one of the most important sectors in any economy adding that apart from generating employment that it has multiplier effects on other sectors.

Get your daily housing news on your mobile phone : Download from goggle playstore Now

He commended NIQS for aligning itself with the developmental efforts of government even as he emphasised the need for government to enter into contractual relationship with different parties and nationalities.

Click here to download Abuja International Housing Show Mobile App

The minister, who was represented by Mr Dickson Onoja, noted that President Muhammadu Buhari, has been working to meet government’s contractual obligations including payment of contractors and contractual debts inherited by the previous administration.

Fashola stated that the ministry was interested in the outcome of the workshop, which he believed would develop the capacity of practitioners in handling various forms of contracts.

On his part, the president of NIQS, Mr Obafemi Onashile, said that the essence of the workshop was to promote the growth of the profession in all relevant areas including the award of contracts.

CHIKA OKEKE

Housing: Real Estate To Undergo Boom Soon – REDAN President

Mr Ugo Chime, the President, Real Estate Developers Association of Nigeria (REDAN), on Thursday said real estate development sector was about to experience a boom.

Chime said this on Thursday while speaking on `Real Estate Management’ at an empowerment programme organised by a religious body in Enugu.

He said that the boom was as a result of the recent successes the association recorded in surmounting challenges and concerns facing the real estate sector.

Chime attributed the recent successes to the ability of REDAN leadership to convince the Federal Government that real estate could contribute more to Nigeria’s economy if given the necessary support.

“Real estate in Nigeria contributes just about seven per cent to the economy while it contributes 20 per cent and 70 per cent to Ghana and UK’s economy respectively.

Get your daily housing news on your mobile phone : Download from goggle playstore Now

“So, we have convinced the Federal Government that real estate can contribute more than its current seven per cent to the economy with the needed support.

“This conviction is yielding results, amongst which the successes we recorded in the past weeks.

“Developers should expect a reduction in prices of building materials in coming weeks, housing schemes in different states and reduction in housing loan interests.

“We’ve been able to conclude a meeting with manufacturers of BUA and Dangote cement and they are interested in making everyone own affordable home.

“This will lead to a reduction in prices of building materials and any loan interest from the National Housing Fund (NHF) is reduced to just 10 per cent or no per cent at all, as the case may be.

“For example, a loan of N5 million from NHF has no interest on it, while that of N10 million to N20 million comes with a 10 per cent interest and not 30 per cent as before.

“Housing scheme contracts has also been awarded to several companies to begin work in different states of Nigeria, amongst others,” said.

Click here to download Abuja International Housing Show Mobile App

Chime, however, said that due to the nascent nature of the profession, some laws needed to be put in place to ensure that the sector thrived.

He lamented the huge capacity gap in Real Estate Management, which he noted was the bane of housing development in Nigeria.

“We hope to embark on training and awareness creation to bridge the gap,’’ he said.

Shuaib Jamiu

NIGERIA HOUSING AWARDS 2018 HOLDS IN A GLITZ AND GLAMOUR CEREMONY

It was a night that professionals in the built and construction industry will live to remember for a long time. The Executive hall of the International Conference Centre Abuja- venue of the 2018 Nigeria Housing Awards (NHA) was gorgeously decorated, benefiting the status of the awards itself.

Before entering the venue, guests were treated to special interviews and an opportunity to pose for photographs at the elegant red carpet anchored by charming ladies.

There were music aplenty, melodious sounds of classic and legendary tunes were dished out one after the other by the Nigeria Civil Defence band- a team that never disappoints. They got the whole hall singing along all night; surely they added glamour to the night. Some of Nigeria’s finest comedians were also present to crack the audience up.

Among those who graced the ceremony is former Minister of State for Health, Chief Gabriel Aduku, the Coordinator, Abuja Metropolitan Management Council, Tpl. Umar Shuaib, The MD/CEO of Federal Mortgage Bank of Nigeria (FMBN), Arc. Ahmed Dangiwa, President, Real Estate Developers Association of Nigeria (REDAN), Rev. Ugochukwu Chime.

Others are Former president, Nigeria Institute of Town Planners, Tpl. Steve Onu, CEOs of real estate companies and other stakeholders in the real estate industry.

The Nigeria Housing Awards recognize and celebrate original and innovative contractors, businesses, teams, consultants and projects that demonstrate excellence in the building and construction environment. The award was set up to encourage competition and competitive pricing in the Housing Construction Industry. The award categorization is carefully designed to recognize the efforts of both established and up-coming organization in the Housing/ Construction Sector in Nigeria.

In addition the event serves as a convergence platform for the building and construction industry. The award recognizes, appreciates the hardworking, excellent and innovative companies and personalities in the Housing/Construction Sector. Over the years, the Nigeria Housing Awards, formerly known as the Abuja Housing Award, has sought to promote standardization and ethical practice in the sector.

The award holds yearly in a classy ceremony attracting the most important institutions, persons and government officials and agencies in the built industry in Nigeria. With unrivalled networking opportunities on the night, the awards are the ultimate celebration of the construction industry’s achievements.

In his opening remark, the Chairman of the Occasion, Chief Gabriel Aduku, and a former Minister of State for Health welcomed everyone specially and enumerated the need for reward of excellence and outstanding contributions in the industry.

There was room for the guest speaker at the ceremony, the President of the Real Estate Developers Association of Nigeria (REDAN), Rev. Ugochukwu Chime to deliver his speech. According to him, the NHA was set up to honour contribution to the sector and to appreciate those who over the years have laboured silently to ensure the development of the built industry.

He said “thank you all, the awardees, your labours have been noticed, there is more to do to ensure housing become epicenter of labour and increased GDP for Nigeria. Housing has a multiplier effect, especially at a time we are looking to create jobs for our youths.”

Recognized at NHA 2018 was Sa’adiya Aliyu Aminu, who won the award for the female CEO of real estate Company of the year, Rev Ugochukwu Chime, Housing Advocacy person of the year (National), while Kunle Faleti won the award In the Diaspora category, the merit award for excellent contribution to mortgage banking and housing finance in Nigeria was given to Kayode Omotoso.

The MD/CEO of the Federal Mortgage Bank of Nigeria, Arc. Ahmed Dangiwa was recognized as the housing finance person of the year (male), while Agnes Tokunbo Martins won the award in the female category.

Also recognized on the night was Haven Homes limited (Innovative real estate company of the year), AFP Furniture (Furniture company of the year), CDK Integrated Industries (Sanitary wares company of the year award), Voda Paints Limited (Innovative paints company of the year), Constrix real estate development company (fastest growing real estate company of the year).

Others include Millard Fuller Foundation (affordable housing project of the year), Royal Ceramics Limited (Innovative marble company of the year), Brains and Hammers Limited (Real estate company of the year), Wiser Estates (Innovative housing project of the year), Abuja Property Development Company (Quality housing project of the year), Bstan Homes Limited (New real estate company to watch award) and Jigawa Mortgage Bank Limited (Innovative mortgage bank of the year).

Azizi Development Limited, Dubai was recognized as the International Real Estate Development Company of the year. Tpl. Steve Onu, Hon. Shehu Liman Wan and Tpl. Umar Shuaib were specially honoured with the lifetime achievement awards for 2018.

The night was crowned with the address of the visioner of the Nigeria Housing Awards, Barr. Festus Adebayo. Adebayo appreciated all the partners that made the event a success both in Nigeria and outside the country.

He said “our aim is not to make the show a talk show; it is to make houses available. When and how will the housing problem be reduced. The government must develop the political will to recapitalize the Federal Mortgage Bank of Nigeria.”

Adebayo added that “we must solve the housing problem of this country. Unemployment is increasing; housing should be used to solve the problem of the Nigerian economy.”

Indeed, the Nigeria Housing Awards 2018 will live long in the memory; the curtains were drawn with group photograph by the awardees and a general dance session by everyone who attended.

Adeleke Samuel, Housing News

AZIZI CROWNED INTL. REAL ESTATE DEVELOPMENT COMPANY OF THE YEAR

Azizi Development Limited, Dubai has been recognized as the International Real Estate Development Company of the year.

The Company received the award at the Nigeria Housing Awards (NHA) 2018 held at the International Conference Centre Abuja.

Although the foundation stones of the present day Azizi Group were laid in 1989, it was in 2007 when the towering presence of Azizi Developments first began to take shape. Mirwais Azizi was driven to design homes and communities inspired by modern urban living.

Azizi Development Company reflects the aspirations of a wide spectrum of lifestyle seekers. It primes itself as a company that unlocks a new lifestyle for the curious and ambitious, setting the ideal platform to live, work and play- and building communities that bring people closer.

Also recognized at NHA 2018 was Sa’adiya Aliyu Aminu, who won the award for the female CEO of real estate Company of the year, Rev Ugochukwu Chime, Housing Advocacy person of the year (National), while Kunle Faleti won the award In the Diaspora category, the merit award for excellent contribution to mortgage banking and housing finance in Nigeria was given to Kayode Omotoso.

The MD/CEO of the Federal Mortgage Bank of Nigeria, Arc. Ahmed Dangiwa was recognized as the housing finance person of the year (male), while Agnes Tokunbo Martins won the award in the female category.

Also recognized on the night was Haven Homes limited (Innovative real estate company of the year), AFP Furniture (Furniture company of the year), CDK Integrated Industries (Sanitary wares company of the year award), Voda Paints Limited (Innovative paints company of the year), Constrix real estate development company (fastest growing real estate company of the year).

Others include Millard Fuller Foundation (affordable housing project of the year), Royal Ceramics Limited (Innovative marble company of the year), Brains and Hammers Limited (Real estate company of the year), Wiser Estates (Innovative housing project of the year), Abuja Property Development Company (Quality housing project of the year), Bstan Homes Limited (New real estate company to watch award) and Jigawa Mortgage Bank Limited (Innovative mortgage bank of the year).

Tpl. Steve Onu, Hon. Shehu Liman Wan and Tpl. Umar Shuaib were specially recognized with the lifetime achievement awards for 2018.

The annual Nigeria Housing Awards recognize and celebrate original and innovative contractors, businesses, teams, consultants and projects that demonstrate excellence in the building and construction environment.

The Award was set up to encourage competition and competitive pricing in the Housing Construction Industry.

This year’s Award which was held in a classy ceremony attracted the most important institutions, persons and government officials and agencies in the built industry in Nigeria.

Among those who graced the ceremony is former Minister of State for Health, Chief Gabriel Aduku, the Coordinator, Abuja Metropolitan Management Council, Tpl. Umar Shuaib, The MD/CEO of Federal Mortgage Bank of Nigeria (FMBN), Arc. Ahmed Dangiwa, President, Real Estate Developers Association of Nigeria (REDAN), Rev. Ugochukwu Chime.

Others are Former president, Nigeria Institute of Town Planners, Tpl. Steve Onu, CEOs of real estate companies and other stakeholders in the real estate industry.

This year’s Abuja International Housing Show was attended by the Ministers of Housing of Ghana, Nigeria, former Minister of Housing, Arc. Sen Sanusi Dagash, and members of the National Assembly.

Adeleke Samuel, Housing News

FRSC, Federal Mortgage Bank strengthen ties

The Federal Mortgage Bank of Nigeria said it has disbursed more than N1 billion to officers and men of the Federal road safety corp (FRSC) in line with its mandate to provide affordable housing to all Nigerians.

This was disclosed when the Corp Marshal visited the mortgage bank to further strengthen the existing partnership between both organisations.

The National housing fund is a federal government scheme, which entitles all Nigerian above the age of 21 years in paid employment to a low interest, government-funded loans.

The loan is for the purpose of building, purchasing or renovating residential accommodation.

It is against this backdrop the FRSC’s Corp marshal visited the federal mortgage bank of Nigeria not only to make a case for the extension of the bank services to his officers, but to also appreciate the established partnership existing between both organisations.

Get your daily housing news on your mobile phone : Download from goggle playstore Now

The Corp marshal pointed out that housing remains one of the major challenges affecting public servants and taking advantage of the National housing fund will be a step in the right direction.

On his part, Managing director of the federal mortgage bank of Nigeria restated the mandate of the bank which focuses on affordable housing for Nigerian workers and disclosed how the bank has so far disbursed funds for the actualization of this course.

Click here to download Abuja International Housing Show Mobile App

The Corp marshal was appointed Ambassador of the National housing fund with the Federal mortgage bank of Nigeria this follows his effort towards promoting the scheme.

TVC News

Estate surveyor to FCTA: Stop allocating commercial plots to individuals

An Abuja-based estate surveyor and valuer has called on the FCT Administration to recover all undeveloped lands in the FCT.

Adamu Kasimu, who is the current chairman of the FCT chapter of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), said plots should be allocated to people that are willing and able to develop them.

He said: “It is sad that government finds it convenient to allocate land in the central business district to individuals. You don’t allocate commercial plots to individuals who sell such plots instantly. Do they really warrant the allocation?” he said.

Get your daily housing news on your mobile phone : Download from goggle playstore Now

“Access to land in the central area of Abuja is very expensive because all the plots are committed. Secondly, the demand side of the market is also not too robust. If you look at the central area, there are lots of unoccupied commercial properties. You don’t release your entire plots to individuals because the future is there,” he added.

Click here to download Abuja International Housing Show Mobile App

On the future of the estate surveying profession, Kasimu said “the future is very bright. If you look at the business district, it is not fully developed. We are expecting development in the near future.”

Malikatu Umar Shuaibu

Experts seek sustainable housing delivery

Built environment experts and other stakeholders have canvassed best ways to overcome housing and mortgage challenges in order to enhance home ownership among Nigerians and promote economic growth.

Real estate developers, architects, builders, promoters of building materials, bankers, policymakers and mortgage providers among others, called on the government to look at funding issues among other impediments to affordable housing delivery.

The experts, who converged on Abuja for a week long housing show, listed inadequate finance, high cost of fund and building materials, poor land administration, lack of creativity in architectural design and difficulty in accessing land as knotty issues militating against affordable housing delivery.

Themed: “Driving Growth and Sustainability in Nigeria Housing and Mortgage Markets through Improving Structures and Policies for Impact,” the forum was organised by Festus Adebayo-led Fesadeb Communications Limited.

Diverse views

Speaking at the forum, President of Real Estate Development Association of Nigeria (REDAN), Chime Ugochukwu, a surveyor, identified poor land administration process as one of the knotty issues in the sector.

According to Chime, land has a lot of characters such as registration, titling and restiveness in some communities, and in some places housing developers cannot have access to the land due to these issues. He tasked stakeholders to come up with recommendations that will enhance housing development in the country.

Get your daily housing news on your mobile phone : Download from goggle playstore Now

The REDAN boss also called for vibrant policy to accommodate interest of financiers and investors not contained in existing laws and policies in the country. According to him, the 1999 Nigerian Constitution, Section 16, under the Fundamental Objectives of State Policy, compelled the country to provide suitable shelter for all citizens.

He urged the government to see housing provision as its primary responsibility by making policy framework and creating the enabling environment for real estate business to thrive.

President, Nigeria Institute of Building (NIOB), Mr. Kenneth Nduka, called for effective synergy between professionals in built environment to tackle challenges of housing.

Through the synergy, he said that professionals would ensure that only standard building materials were used in the provision of affordable houses.

Ghanaian Deputy Minister of Works and Housing, Mrs. Freda Prempeh, urged African countries to boost housing development by exploring local resources to achieve local content.

The deputy minister noted that despite the fact that the continent was endowed with natural resources such as timber, clay and granites among others, these have not been harnessed for housing development.

Click here to download Abuja International Housing Show Mobile App

She called on African governments to ensure collaboration with private sectors to acquire landmark and provide infrastructure needed for effective housing development.

Finance

Executive Director, Nigeria Mortgage Refinance Company (NMRC), Dr Chi Akporji, noted that NMRC had evolved a technology platform, which allowed the stakeholders and key players in the industry to come together with the goal of reducing housing cost and increase housing efficiency.

She decried cases of unoccupied houses in Abuja and other places in the country, adding that studies had revealed that the houses were used by corrupt people to dumb stolen money.

Some indigenous construction companies called on the Federal Government to assist them with loans to boost their businesses.

Managing Director of Window Story, Mrs. Helen Uchechukwu, an architect, urged government to reach out to Small and Medium Scale Enterprises (SMEs) for financial support.

She said: “The Bank of Industry and Central Bank of Nigeria should try and identify and assist the SMEs through the show because most of the SMEs in the built environment are just trying to grow.”

According to her, some of the SMEs are looking for loans and incentives to boost their businesses but due to some bottlenecks, they cannot achieve it.

Assistant Manager, SOLIGNUM Nigeria, Mr Gosife Etele, said that the company’s participation in the show had helped his organisation in boosting patronage through sensitisation and awareness being created during the show.

Other building material manufacturers also urged the government to assist local manufacturers for economic growth, noting that many companies are highly in need of steel to boost production.

Suggestions

Director, Centre for Housing Studies, University of Lagos, Prof. Gbenga Nubi, called on the governments to replicate the Jakande Mass Housing Scheme model in all the states of the federation, including Federal Capital Territory to bridge the estimated 17 million housing deficit in the country.

Nubi expressed worries over the country’s inability to do things right in housing delivery after the impactful mass housing scheme of Alhaji Lateef Jakande, a former governor of Lagos state between 1979 and 84.

Pointing out that the government has the responsibility to provide housing for its citizens, make infrastructure worthwhile and building materials possible to access, he said: “Every responsible government can follow employee housing scheme of Jakande to bridge accommodation deficit.”

According to him, Jakande housing scheme sold two bedrooms flat for N2, 500 as against N50, 000 being obtainable in the market then, insisting that if government could emulate such feat, it would guarantee affordable houses for civil servants and other accommodation seekers.

Akporji corroborated Nubi on the replication of Jakande housing scheme for states, saying that the government should make concerted efforts towards it across the country.

Govt’ response

Minister of Power, Works and Housing, Babatunde Fashola , stated that Federal Government’s new policy would ensure local production of building materials to bring down the cost of housing in the country.

The minister said the new policy would make the housing sector vibrant and also create jobs.

Special Adviser, Property and Investment, Ogun State, Babajide Odusolu, called for concessions towards provision of affordable homes such as a reward system and tax credits.

Odusolu also advocated pioneer status for players in real estate sub-sector fiscal incentives, use of technology in construction, review of planning guidelines to encourage planned density enhancement and provision of concessions on fiscal terms for developers of affordable homes and critical supply items.

He also canvassed for the revisit of vocational training policies and procedures, and making mortgage repayments for first homes/primary homes below N15million, a tax-deductible expense.

Odusolu, who is also the Managing Director of Ogun State Property and Investment Corporation (OPIC), stressed the use of technology such as formwork technology in construction, adding, “it is durable, reusable, more efficient, increased quality, faster construction and reduced labour costs.”

Besides, he said that the use of formwork technology was 25 per cent to 40 per cent cheaper through time and cost savings.

The OPIC’s managing director identified critical supply challenges as material sourcing, huge labour skills gap, infrastructural deficit/financing and constraining tax/fiscal policies.

Last line

Efforts should be made by organisers of such forum to package their findings and all suggestions should be packaged in a communiqué and forward to the government for necessary action.

Dayo Ayeyemi

 

Dangote pledges collaboration with FMBN, supports N500bn recapitalization

Africa’s richest man and President/CEO, Dangote Group, Aliko Dangote, has pledged collaboration with the Federal Mortgage Bank of Nigeria (FMBN) in the bank’s renewed drive towards affordable housing delivery for the largely un-housed Nigerian citizens.

Dangote who was at the apex mortgage bank’s office in Abuja on courtesy visit along with Isyaku Rabiu, chairman/CEO, BUA Groups of Companies, expressed preparedness to partner with FMBN to boost affordable and social housing delivery for Nigerians.

This development has brought both excitement and hope in the nation’s housing sector given that the two business moguls are frontline cement producers. What they can do to the housing sector using their cement product which is a major component of housing development can only be left to the imagination.

“Dangote, who ranks as Africa’s richest business man and investor, and Rabiu, a leading Nigerian businessman with vast investment in manufacturing, infrastructure and agriculture, are Africa’s two largest producers of cement, a critical input in the housing construction industry”, a statement from FMBN obtained by BusinessDay at the weekend noted.

Dangote told members of the FMBN board during the visit that he was in total support of the proposed

N500 billion recapitalization of the bank, explaining that it was a much needed development that would help power FMBN’s efforts at more effectively discharging its mandate.

Get your daily housing news on your mobile phone : Download from goggle playstore Now

Recently, the federal government announced plansto inject N500 billion (about $1.4 billion) into FMBN over the next five years in an effort to spur homeownership that has failed to take off in the country.

Expectation is that the inability of the mortgage industry to bridge the huge housing deficit estimated at 17 million units may soon turn the corner following this intervention. The support for the fund coming from Dangote has given fresh hope for the fund and its purpose.

Experts in the mortgage industry expect the N100 billion annual fund intervention to make housing more affordable as it is expected to encourage Nigerians to take mortgage as a preferred choice of raising fund for owning homes.

Interestingly, Dangote also assured that his company was ready to collaborate with FMBN towards reducing the housing deficit by increasing the tempo and scale of social housing provision across the country.

Click here to download Abuja International Housing Show Mobile App

“Count me as a friend of FMBN. We are open to collaborating and supporting the good work that your bank is doing towards ensuring the provision of affordable housing to medium and low income earners in Nigeria”, he said, advising the management of the bank to consider adopting mass housing models that have worked in other countries such as Ethiopia.

In the same vein, Rabiu also said he was committed to a close partnership with FMBN. “I am committed to forging a partnership that will add value to FMBN’s work and I look forward to further engagements in this regard”, he said/

Adewale Adeeyo, FMBN’s board chairman, commended the two business moguls for their visit and good intentions to partner with FMBN, assuring that the bank would work closely with them towards the consolidation and implementation of the partnership.

Endurance Okafor

How weak bank loan slows real estate performance

The real estate industry in Nigeria seems to depend heavily on commercial banks’ funding, as the decline in lending rate to this industry has contributed in pulling it in downward trajectory.

Total bank lending to construction and real estate sector declined by 11 percent from N4.81 trillion in 2015 to N4.2 trillion in 2017.

On the reasons for the decline in lending to the sector within the period under review, analysts attributed it to the nation’s five quarter recession which was experienced between first quarter of 2016 into the first quarter of the following year.

“The economy was in recession, and even the sector is still in contraction. So, lending to most sectors declined.

Banks saw other sectors viable enough to give credit to because they were more certain to get their return from those sectors in order to prevent bad debt which is not good for their books,” an analyst commented on the condition of anonymity told Business Day by phone.

Like other commodity dependent countries, Nigeria has had to weather the storm of declining petrodollars, following a lengthy collapse in oil prices which started mid-2014 and production disruptions caused by disgruntled militants who damaged oil pipelines in their clamour for better compensation for the oil extracted from their region.

Get your daily housing news on your mobile phone : Download from goggle playstore Now

This resulted to the country’s longest contraction in more than 25 years, although it emerged from the negative growth when oil prices increased, and as such has expanded for four consecutive quarters into 2018.

Bank lending to construction and real estate sectors in Nigeria has remained dismal when compared to the likes of South Africa, the continent’s most-industrialized economy.

With a population of about 55 million, mortgages in South Africa account for almost 30 percent of total credit, the largest component of banks’ assets, which amounted to about ZAR5.14 trillion ($382 billion) at the end of January, according to central bank data.

Click here to download Abuja International Housing Show Mobile App

Negative and weak growth in construction and real estate sector of Africa’s largest economy continues to drag growth in the country’s GDP even as it slowed down in the first quarter of 2018 to 1.95 from 2.11 in the previous quarter owing mainly to weak bank lending to the sector.

Meanwhile, Africa’s most populous nation has a housing deficit of about 17 million units and its mortgage rates ranging between 7-10 percent for the National Housing Fund (NHF) and between 15-25 percent for commercial mortgage institutions which is considered by industry experts as one of the highest in the world.

Another analyst however pointed out the importance of bank lending to the real estate sector, saying, “this sector of the economy is the kind that is in steady need of liquidity and long term capital; when not available , it will continue to be in the position it is now,” the analyst who asked not be quoted said.

The economy, he added, needed to grow more in order for the property sector to feel the impact. “However, the economy has to expand more as this will rub off on the purchasing power of the citizens and, as such, there will be the demand for the products produced by the sector; so making funds available to the sector is not just enough, because if there are no demands to meet their supply, the sector will still be doing as badly as when it lacked funds,” the analyst added.

According to the National Bureau of Statistics, real growth rate of the real estate sector, real GDP growth recorded in the sector in Q1 2018 stood at -9.40 percent, lower than growth recorded in Q1 2017 by 6.30 percentage points and lower by 3.48 percentage points relative to Q4 2017. Quarter-on-quarter, the sector grew by -30.57 percent in the Q1 2018.

It contributed 5.63 percent to real GDP in Q1 2018, lower than the 6.34 percent it recorded in the corresponding quarter of 2017 and lower than the 7.03 percent in the preceding quarter.

This has been ascribed to the constraints placed on foreign exchange access that affected the construction and real estate industry, which is profoundly import-based, and the unbalanced economic climate, which has affected the general inclination to invest in the country’s real estate sector.

“The government has a larger role to play in the aspect of policy. If the government is able to develop and implement policies that are favorable to these sectors, definitely, they will see a boom. The prevalence of a lot of taxes and additional charges that are being put on construction companies and real estate developers is not helping and it frustrates the entire process of being able to initiate and complete a project,” Hakeem Sadiq, Founder of Zama,a real estate advisory firm, said

Endurance Okafor

WP Facebook Auto Publish Powered By : XYZScripts.com
Translate »

You have successfully subscribed to our newsletter

There was an error while trying to send your request. Please try again.

Housing News will use the information you provide on this form to be in touch with you and to provide updates and marketing.