Douglas Elliman’s Noble Black on the state of the housing market and Gov. Andrew Cuomo, D-N.Y., advocating for a permanent two percent property tax cap.
Mortgages have reached a record-high of $354,500 on average, showing that high-end buyers are having more success at purchasing a home, according to the Mortgage Bankers Association.
Douglas Elliman’s Noble Black said on FOX Business’ “Varney & Co.” that the average size of mortgages consumers were looking to obtain a home is a good sign for the housing market.
“It shows confidence in the market. Overall the economy is still doing well. People still feel positive about buying,” he said on Thursday
MBA’s data shows seasonally adjusted index of loan applications to purchase a home rose 4.3 percent to 250.8 in the final week of March 8.
Black stated that the monthly mortgage rate is also a sign that the economy continues to gain strength.
“You’re not going to do that unless you’re feeling good about the market,” he said.
Black also discussed New York Democratic Governor Andrew Cuomo’s push for a permanent 2 percent property tax cap, saying, “I think it’s great …. I think taxes were getting out of control in certain markets. New York is not known exactly known for low taxes in general, and I think he’s trying to make it where we’re competitive.”
When asked if the property tax is related to the governor concerns over the SALT cap, Black said, “I think it’s a great response to SALT, I don’t think it’s the cause of SALT. This is actually one thing that he did very well a few years ago, this is a continuation of it.
ZOLA Electric (‘ZOLA’), the leading renewable energy brand in Africa, with 200,000 installations and more than 1,000,000 daily users has announced plans to bring clean, affordable, reliable 24 hour power to Nigeria.
According to Mr. Bill Lenihan, Chief Executive Officer, ZOLA’s entry into the Nigerian market is in line with the mission of the company to use distributed renewable energy solutions to make clean, affordable reliable 24 hour accessible for anyone, anywhere.
“ZOLA Electric is a power solutions pioneer that is now one of the most trusted brands in Africa’s distributed renewable energy market. We have successfully delivered our clean, affordable and reliable power solutions across Tanzania, Rwanda, Côte d’Ivoire, and Ghana.
We’re super excited to make our clean, affordable and reliable 24 power solutions available to Nigerian homes, business and organizations.
Mr. Lenihan explained that ZOLA will expand its distributed smart storage + solar energy model and launch an affordable renewable energy alternative for Nigerians in a bid to deliver clean energy access to over 1 million households and businesses in Nigeria over the next three years. This ambitious expansion is focused on improving environmental, health and economic outcomes while driving the transition to clean, renewable energy.
Nigeria is a rapidly expanding economic powerhouse, with population growth tipped to surpass the United States by 2050. It is Africa’s largest economy and its biggest oil producer. Despite this, the Nigerian electrical grid is unable to meet basic energy demands.
Power from the grid is unreliable and expensive and this has driven more than 100 million Nigerians to rely on diesel generators to power their basic energy needs in their homes or apartments.
“With the current electricity access deficit in Nigeria affecting an estimated 80 million people each day, ZOLA’s expansion will help Nigerian homes and businesses to access reliable 24 hour, with smart storage + solar for a monthly price that is less than the average energy outlay on diesel generators.
By combining our PAYGo micro-finance leasing and mobile money payments, ZOLA’s energy access model is financially inclusive and adaptable to energy need and income” said Lenihan.
He further revealed that the affordability of ZOLA’s systems allows customers to redirect their current energy spend on diesel and power bills towards a smart storage and solar system that they will own in the long term resulting in significant cost savings for customers.
Our power systems give customers the flexibility to use their own home appliances at any time of the day.
Reliable power generates economic productivity – businesses can stay open for longer or use evening hours for other income generating activities.
The expansion of ZOLA’s business operations into Nigeria is also expected to improve areas such as; employment (with the renewable energy sector tipped to become one of the largest employers in Africa), significantly reduce air pollution and CO2 emissions and help small, medium and large businesses to improve efficiency and deliver greater economic benefits that they can share with customers and employees alike.
Following the conclusion of the presidential election, analysts at FSDH Merchant Bank Limited believe there are pressure points in the economy that the federal government must quickly address to stimulate broad-based and inclusive growth.
According to the Lagos-based financial institution, the Nigerian economy has not been expanding enough to lift its citizens out of poverty.
Owing to this, the bank in a report stressed the need for the economy to expand faster than it is at the moment.
Providing insights on the report, the Head of Research and Strategy at FSDH Merchant Bank Limited, Mr. Ayodele Akinwunmi, listed the economic pressure points to include weak disposable income in the country; high unemployment rate; weak infrastructure development in the economy that may not support the growth ambition of the federal government; economic depression in the real estate sector; fragile foreign exchange market and weak revenue generation for the federal government, which has led to large fiscal deficits.
Akinwunmi listed policy option to address the economic challenges to include the removal of all administrative delays in obtaining licences and approvals.
This, he stated includes titles to landed properties for building and agricultural purposes.
He urged the federal government to support the provision of long-term mortgage loans at concessionary terms for workers, in order to activate economic activities in the real estate sector in Nigeria
Furthermore, he recommended investment in data generation in the solid mineral sector.
“Government can sell the data to potential investors interested in the sector. This will reduce the risk inherent in this untapped sector of the Nigerian economy
“Urgent restructuring, deliberate and consistent investments in the nation’s educational system to enable it provide relevant trainings that are needed in the modern digital age.
“We observed critical skill gap in the nation’s educational system, particularly in the public schools at all levels. The sector can create more jobs for teachers and administrators and can also attract foreign investments and save foreign exchange earnings.
“There is the need for human capacity building in business management and leadership. This must not be left to business schools, which are only affordable to a few people
“Establishment of well-funded technical training centres in all local government areas in the country in conjunction with private sector operators,” he added.
In addition, Akinwunmi called for investment in infrastructure (through partnership with the private sector) that would reduce risks involved in agriculture and agro-allied industries.
He also advised the government to reduce import duties on imported manufactured cars. This, according to Akinwunmi, would help avoid high cost associated with brand new cars in the country so that Nigerians are not pushed to buy fairly used vehicles with their associated negative environmental impacts.
“While we understand the need for the government to use the import duties to encourage investments in the local auto industry, a graduated import duty policy for a few years, say five years, will be appropriate
“Investments in affordable public healthcare system to increase productivity of workers, reduce brain-drain and reduce foreign medical tourism with its associated drain on foreign exchange earnings
“Adjustment of the electricity tariff to reflect current costs in the economy and to enable the sector attracts investments and guarantee efficient metering system
“The removal of the ‘subsidy’ on the Premium Motor Spirit (PMS) to free up more resources to critical sectors of the Nigerian economy and to drive competition among the operators and attract investment in the sector,” he added.
According to him, the Central Bank of Nigeria (CBN) needs to maintain its tight monetary policy stance to ensure price stability.
In addition, he said the CBN may also consider the removal of its multiple exchange rate system.
Continuing, the FSDH report projected that February 2019 inflation rate would drop marginally to 11.31 per cent, from 11.37 per cent in January, even as it anticipated that inflation to remain in double digits.
“The external reserve dropped consistently in the month of February. However, we observed that the external reserves have been rising since the beginning of March largely driven by portfolio investment. The current position of external reserves continues to provide short-term stability for the value of the naira.
“Capital importation via Foreign Portfolio Investors (FPI) in the Investors’ and Exporters’ Foreign Exchange Window (I&E window) increased for the second consecutive month in February 2019. This provided support for the foreign exchange rate
“The medium-term stability in the foreign exchange market will depend on the country’s foreign exchange receipts from both crude oil and non-oil products. Appropriate policies, some of which we have mentioned above, to attract Foreign Direct Investment (FDIs) into Nigeria, will be necessary to guarantee medium-term to long-term stability in the foreign exchange market,” it added.
FX Market Gets Fresh $269.92m, CNY 31.34m Injection
In continuation of its periodic intervention in the interbank segment of the foreign exchange market, the Central Bank of Nigeria (CBN) last Friday, injected the sum of $269.92 million and CNY 31.34 million in the Retail Secondary Market Intervention Sales (SMIS) of the foreign exchange market.
The dollar interventions were for customers in the agricultural, airlines, petroleum products and raw materials and machinery sectors, while the CNY 31.34 million component was for payment of Renminbi-denominated Letters of Credit for agriculture as well as raw materials .
Confirming the figures, the Bank’s Director, Corporate Communications Department, Mr. Isaac Okorafor said the level of stability in the market was commendable and would be sustained by the Bank.
Friday’s transaction was in addition to the $210 million injected into the Wholesale, Small and Medium Enterprises, and Invisibles segments of the market on Tuesday, March 5, 2019.
The naira exchanged at N357/$1 on Friday in the Bureau De Change segment of the market, while the Chinese Yuan, closed at N47/CNY1.
Citing the whopping $4 billion spent annually on importation of textile materials into the country, the CBN last week added all forms of textile materials to the list of items that are not eligible for foreign exchange from the official windows with immediate effect.
The apex bank has, however, promised a financial intervention to textile manufacturers with the provision of funds at single digits rate, to refit, retool and upgrade their factories to enable them produce high quality textile materials for the local and export market. Speaking at a meeting with stakeholders in the textile industry in Abuja, the CBN Governor, Mr. Godwin Emefiele, said the decision was critical towards reviving the moribund sector and creating jobs for Nigerians.
He warned all FX dealers in the country to desist from granting any importer of textile material access to foreign currency in the Nigerian foreign exchange market. He said going forward, the apex bank would adopt a range of other strategies that will make it difficult for recalcitrant smugglers to operate banking business in Nigeria, adding that details of the proposed strategies would be unfolded in due course.
“Effective immediately, the CBN hereby places the access to FX for all forms of textile materials on the FX restriction list,” Emefiele announced. However, he noted that the apex bank would initially support the importation of cotton lint for use in textile factories, with a caveat that such importers will begin to source all their cotton needs locally beginning from 2020.
Rwanda’s government aims to put its 49 per cent stake in the country’s biggest cement maker, Cimerwa, up for sale this month, the prime minister said on Saturday.
The company, which is 51 per cent owned by South Africa’s PPC Limited, has an installed annual production capacity of 600,000 tonnes.
Reuters quoted him to have said: “We have asked our partners if they are interested and the timeline is one month,” Edouard Ngirente told a meeting of senior officials broadcast on national television.
“By the end of this month we will auction (the stake).”
He said PPC had yet to specify if it was interested in the stake, which he gave no valuation for, adding that other buyers would be sought if necessary.
A construction boom in Rwanda has driven up demand for cement as the government builds roads, power plants and a new international airport. Private developers have also been building new houses and office blocks.
The head of Cimerwa told Reuters in July that demand for cement was growing at 7-8 percent annually as new building projects come up. Rwanda also imports cement from neighbours Uganda and Tanzania.
Botswana Sees Lower Mineral Revenues Diamond rich Botswana expects mineral revenues in the 2019/20 fiscal year to drop by four per cent to 13.6 billion pula ($1.26 billion), due to a decline in royalties and dividends, a minerals ministry budget document showed on Thursday.
Mineral Resources Minister Eric Molale, said in the document that global diamond demand was showing signs of slowing down. Retail jewellery sales fell during the last quarter of 2018, he said, while polished prices continued to decline into the beginning of 2019, albeit at a slower rate.
“Trading and prices of diamonds are expected to remain subdued during the first quarter of 2019 due to significant overstocking of small polished diamonds,” Reuters quoted Molale to have said in the document presented to parliament.
Debswana, a joint venture between Anglo American’s De Beers and Botswana, produced 24.1 million carats of diamonds in 2018, a 6 percent jump from the previous year.
The company is the largest contributor to Botswana’s government revenues.
Debswana, a joint venture between Anglo American’s De Beers and Botswana, produced 24.1 million carats of diamonds in 2018, a 6 percent jump from the previous year.
The company is the largest contributor to Botswana’s government revenues.
Lotfi Senhaji said the Nigerian plant would cost $1.5 billion and would have a total capacity of 1 million tonnes of ammonia.
OCP signed a protocol agreement in June to build the industrial platform with Nigeria’s Sovereign Investment Authority.
In Ethiopia, the Moroccan firm expects its chemical plant to be operational by 2023 or 2024, with an initial capacity of 2.5 million tonnes of fertilisers, he said.
These investments are part of a strategy to boost phosphate-based fertiliser use and production in Africa.
Nigeria has signed a US $10m deal with United Kingdom-based Iconic City Limited for the development of a 3.8ha land in Alakia, Ibadan, the Oyo State capital, into a residential housing estate.Group Managing Director and Chief Executive Officer, of Odu’a Investment Company Limited, Mr. Adewale Raji who signed the deal with the UK firm said the agreement aims at curbing housing deficit in the country.
“The housing deficit in the country is over 22 million. Investment in housing remains an important and profitable venture, especially when affordability is considered,”said Mr. Adewale Raji.
“The initiative was hinged on the Federal Government’s Economic Recovery and Growth Plan which had human capital development as one of its cardinal objectives with housing provision as key factor in achieving that goal,” he added.
Westlink Iconic Estate
The proposed residential housing estate dubbed “Westlink Iconic Estate” will be a medium density luxury estate consisting 124 households. The housing products are 60 units of three-bedroom apartments, 42 units of four-bedroom terrace houses, 14 units of five-bedroom semi-detached duplexes, eight units of six-bedroom fully detached duplexes and 36 commercial and business units.
Mr Adewale Raji affirmed that housing types will vary to allow for different market segmentation subscribers. Construction of the project is scheduled for completion in 2years.
Mr Adewale Raji also quoted that the partnership was going to give his firm the opportunity to utilize its professional experience ranging from training, working to build a world class mixed luxury residential estate in Ibadan.
The government of Ghana together with local banks have set aside US $51m to finance abandoned housing projects in the country.
During the state of the nation address, President Nana Akufo-Addo addressed the concerns on the abandoned projects stating that his administration will complete the WA, Tamale and Koforidua housing projects, started by the Kufuor administration in 2006.
The president also added that the US $180m Saglemi Housing Project, started under the National Democratic Congress (NDC) government is high on their priority list in 2019. The 5000 housing units was expected to cater for the low and middle-income earners in the country.
Freda Prempah, the Deputy Minister of Works and Housing on the other hand said that the government is establishing the value for money on the project and reconciling the number of houses built with the schedule of payments made, and accelerate delivery.
Bridging housing deficit
Ghana faces housing deficit in excess of 1.7 million housing units and completion of abandoned housing projects helps bridging the gap. The government of Ghana plans to bridge the housing deficit by delivering a minimum of 85,000 housing units annually for the next 20 years.
The former Deputy Minister for Works and Housing, Eugene Boakye Antwi voted to set aside US $184m has been to establish a mortgage and housing finance and will be seeded with at least US $18m every fiscal year over the next 5 years. He further added that real estate developers are willing to pre-finance the buildings as long as the government offers a guarantee.
The government of Namibia has availed land that will pave way for start of construction of 1590 social and debt-financed houses at the coastal town, to ease the housing shortage at the town.
According to Marketing and Communication Officer of the Swakopmund Municipality, Aili Gebhardt, the Municipality has issued the the serviced land to 39 small contractors and issued out tender for the supply of building materials. Each contractor will build 40 houses, 16 being credit link houses and 24 social houses.
60% of the houses will be under the Build Together programme while the remaining 40% will be debt-financed. The cost of the credit-financed houses will range between US $13,000 and US $35,000.
“We have signed contracts with the recipients and instead of getting a loan, they will get the keys of complete houses which they in turn will be responsible to pay off. Applicants will have to obtain financing from any financial institutions.,” said Aili Gebhardt.
In a renewed bid to cushion effect of housing shortage in Lagos, a new housing project is being considered at the Ogudu Government Reserved Area extension, Alapere, Lagos.
The project, a Public Private Partnership (PPP) initiative is at the instance of the Lagos State Property Development Cooperation (LSDPC) and Direct Construction Nigeria Limited. The housing development called ‘The Avenue Estate’ hinges on the urban renewal drive of the Lagos state government and is situated in an expanse of land of about 17,000sqm at the Ogudu section of the Alapere/Oworosoki expressway.
It consist, 48 units of four bedroom semi detached duplex with one bedroom boys quarter and facilities which will include, five A-side football field, gymnasium, swimming pool, children play ground, 24 hours electricity, good drainage system, water treatment plant, central sewage system and other facilities.
Due to a reduction in the supply of luxurious and contemporary quality housing in the mainland as a result of increasing demand, which has led to many relocating to the Island to seek for desired homes, LSDPC in partnership with Direct Construction Limited is set to change the narrative.
The location is strategic and the most convenient connecting points between the mainland Lagos and the Island Lagos.
Specifically, the location offers the best of serene and secured environment while the designs and structures are tailored made as well as allow for a workable deliverable price as agreed between the subscribers and the developer.
Average unit of the housing will occupies about 174Sqm floor space of livable area, typical ground floor and first floor. Each semi-detached house has car park space for up to three to four cars.
According to sources, mortgage facilities would be made available through the Lagos Building Investment Company Plc (LBIC) for intending subscribers.An official of LSDPC, Olusola Martins said the project aimed at providing houses for residents who falls within the middle as well as those in the upper income class of the population.
He told The Guardian that subscribers would be introduced to mortgage facilities to enable them have access to finance and purchase their units.
He said, “The target buyers are the middle classes; we are also looking at the upper middle class as well. The project is embarked on, to provide more houses for Lagosians.
We have arrangement with mortgage houses that would also provide mortgage for buyers.
“When people come, we introduce them to mortgage houses that can give them mortgage so that they won’t need to bring out the whole money from their pocket”.
Price for unit is offered at an introductory price of N65, 000,000 for outright sale and a twelve months installment payment plan. The delivery period for the project is 12months.
The government of Egypt is set to construct over 40,000 housing units in the new administrative capital by the end of June 2020.
Minister of Housing, Utilities and Urban Communities, Essam al-Gazzar said that the project is being implement by the Ministry of Housing and is divided into eight neighborhoods, including villas, and mixed housing in the third district, Capital Residence.
The project include construction of 23,412 housing units, 952 villas and 2,050 mixed housing units in the third district, Capital Residence while the fifth district, the New Garden City with an area of about 1,000 acres will have 23,000 housing units consisting of residential apartments and villas, in addition to an area of residential towers with mixed use in the lower floors with about 2,000 housing units and two hotels.
Moreover, the Ministry of housing plans to complete the first phase of a water treatment plant, five international schools, a restaurant complex and a mosque, as well as the government district and the investment zone for the New Administrative Capital.
Largest park in the world
Essam al-Gazzar also added that the Ministry has scheduled to complete the implementation of the central gardens project at the “Capital Park” which is more than than 10 kilometers long and has an area of more than 1,000 acres, making it one of the largest parks around the world.
“The central park of the New Administrative Capital will provide greater opportunity for community interaction between the capital’s residents and other residents in its wider scope, and is park is expected to host more than two million visitors annually,” said Gazzar.
The park will also serve as a catalyst for encouraging a healthy life, in accordance with global rates including environmental value, green spaces, and areas for physical activities and recreation.
Most Nigerians outside the financial system who have interest in the country’s mortgage sector have always heard that the sector’s slow growth find explanation in the inaccessibility and unaffordability of mortgage loans due to high cost of funds reflected in high interest rate, and demand for high equity contribution from borrowers by lenders.
But there are more to the causes of the slow growth of this sector which are almost always not talked about. Essentially, little or no note is taken of these other contributors to this slow growth among which are the huge stress which mortgage lenders pile on borrowers and the often non-existent partnerships which some of the mortgage lenders deceive home seekers into believing that they have with developers, giving the borrowers baseless hope and false impression that they are just a few steps away from home ownership.
Part of the statutory functions of primary mortgage banks (PMBs) and mortgage institutions generally, is to provide housing finance or loan to those who need same to build, buy or renovate existing houses. But, in more cases than one, those who apply for loans from these lenders hardly get them and where they do, they are often subjected to harrowing experiences through near-impossible requirements that leave the borrowers stressed out and almost frustrated.
Many have been cajoled by developers into subscribing to their houses through mortgage only to get in and find out that the invitation is a mere cover shielding the stress and pain in accessing loans for their dream houses. “My experience with one of these lenders is better imagined than expressed”, says Israel Okafor, a staff of an oil company who applied for mortgage loan from one of the PMBs.
Okafor explains that he was “deceived” by the PMB into believing that it was in partnership with a developer who was building over 500 housing units of various house-types at relatively low prices for mid-low income earners. “The PMB told me that it was also financing and marketing the estate and, at the same time, providing mortgage for prospective buyers. My attraction was not as much in the financing and marketing aspect as it was in the comparatively low interest rate of 17 percent and 10-year loan repayment period which the bank dangled to me”, he said.
According to Okafor, the bank demanded just 20 percent equity contribution from him for any of the housing units that he wanted to buy from the estate selling for between N5million and N8 million per unit, adding that as a demonstration of his readiness to take up the mortgage and buy the house, he made an equity contribution in excess of 30 percent of the cost of the house.
“Over six months down the line, the developer, the mortgage bank and I have been on a Round Robbin, occasionally stopping at the middle of nowhere only to discover that, in all of this, it has been motion without movement. It has been one story after another”, he fumes.
Ayodeji Adediji, is an ex-banker who worked with one of the big names in the industry, but resigned because “I want to do my own thing and see what impact I can make on the economy from this point”.
He also has a similar experience, differing only in the approach adopted by his own lender who, he said, has kept his N5 million which he paid as equity for the house he wants to buy from a developer who is also in another phantom partnership with the same mortgage bank.
“As I speak to you, my money has been with the mortgage bank since the past eight months; I am told it is in escrow account in which case it is not yielding any interest for me; the developer is very slippery and insincere with delivery date for the estate. Every day, like a fraudulent referee, he shifts the goal post. By the last count, he has shifted the delivery time three times and still counting”, he lamented.
A banker, who does not want his name mentioned also shared his experience, saying he came close to losing his money to developers over unrealistic delivery dates, lamenting that on each occasion, his money was given back to him after he had nurtured and came close to realizing a home ownership dream.
People with these experiences will hardly ever seek mortgage facility, nor will they encourage any of their relations or friends to have same experience and this is a major factor that can slow the growth of the mortgage industry.
Not too long ago, in a move aimed to address the housing problems in Nigeria, some notable PMBs and real estate developers entered into another strategic partnership aimed to provide housing and mortgage for prospective home buyers. That partnership which, it was hoped, would in 24 months deliver a residential community comprising 554 housing units is yet to make any impact.
This is a worrisome development that may continue to stultify the growth of this all important sector. The setting up of both the Federal Mortgage Bank of Nigeria (FMBN) and the National Housing Fund(NHF) were well intentioned, but their operations have left them mired in mucky waters with poor capital base.