Nigeria losses about $1.5billion on election postponement

Lagos Chamber of Commerce and Industry (LCCI) has stated that the postponement of the Presidential election by INEC cost the nation no less than $1.2billion loss owing to the disruption of activities across the states.
Independent National Electoral Commission (INEC) postponed the general elections a few hours to the commencement.The elections scheduled to commence Saturday, February 16 with the presidential and National Assembly elections, will be held February 23. Governorship and state houses of assembly elections will take place on March 9.


The Director General of the Chamber, Muda Yusuf in a chat with The Guardian noted that several activities were disrupted as a result of the postponement adding that a slowdown should be expected in the days ahead till the elections are conducted.

Yusuf stated that many SMEs’ activities were affected; the airports and seaports were shut down while many people have had to move from one location to another.

He noted that the impact of the loss will be felt across the sectors of the economy, especially for activities scheduled for February 23rd, the new date for the elections.

Source: TheGuardian


Real estate in general is a tricky investment option. People have the wrong belief that since real estate is an asset-backed investment and it has liquidation value, it is risk free. That is completely wrong. Property does provide more security compared to some of the other types of investments but it is not risk free. Its safety is subject to several factors, such as the market risk and specific risk. Market dynamics, macroeconomic developments, trends, demand and supply are some of the factors that determine the performance of a property investment.

Kenya’s real estate sector is increasingly becoming a tricky investment option following the ever-increasing supply against declining demand, in the middle of a challenging macroeconomic environment. For the last three years, all available data point to the same direction. Τhe real estate market has been overestimated and the average investor has been dragged into absurdly high-risk investments in a market that should be at a much lower level.

As per the latest house price index, the market is under pressure. The real estate sector has recorded its slowest quarterly growth in four years, giving weight to recent property market reports that have signaled a slump in demand despite increased supply of new housing units. The sharp recorded dip is linked to uncertainties in approval laws, difficulty in accessing bank loans and a general slowdown in spending power among buyers as well as oversupply.


Fresh Kenya National Bureau of Statistics (KNBS) data, covering the third quarter ended September 2018, shows real estate recorded the slowest growth since the 5.4 per cent registered in the fourth quarter of 2014. According to available data there is an oversupply of commercial offices of 5.3 million square feet, which is expected to grow to 5.7 million square feet in 2019.The retail segment has an oversupply of two million square feet that is expected to increase with the opening of malls, such as Crystal Rivers in Athi River. The residential sector has increased supply in the middle to high-end residential sector, with a decreasing effective demand, hence recording a decline in occupancy rates in 2018.

Cement consumption and production of galvanized sheets used for construction also fell this year, signaling the slowdown in real estate activity. Kenyan banks’ non-performing loan (NPL) ratios are among the most elevated among major economies in Africa, and are likely to be exacerbated by continued contractors and suppliers who owe lenders billions of shillings. Latest Central Bank of Kenya (CBK) data shows the ratio of bad loans to total loan book among Kenyan banks stood at 12.3 percent at the end of October.

market cycle


For the real estate sector, NPLs increased by Sh14.4 billion (48%) as a result of slow uptake of developed housing units, and delay in subdivision of land, indicated the CBK report. The real estate market in Kenya has entered the downward part of the market cycle. Kenya’s property market is now in the middle of the hyper supply phase. During this phase, the supply of new construction continues to come in, while demand falls. This causes occupancy rates to fall, and rental growth to slow. Values follow the same trend. Different suppliers of new construction begin to compete heavily for tenants and buyers.

kitchenEventually, market participants recognize the downturn and commitments to new construction should theoretically slow or stop. If they do so soon enough, the market can avoid a severe downturn or even stay in this phase for a while. However, due to the lagged nature of construction, this doesn’t always happen. If new construction continues to come in faster than demand and occupancy drops below its long-term average, then the market falls into the final phase: recession. Kenya has been in this phase for almost two years now. It’s just a matter of time before it enters the next phase which follows hyper supply. That is recession.

In this phase, massive oversupply, together with negative demand growth, causes rents and values to decline, leading to losses. Additionally, the price increases caused by hyper supply often force the central banks to raise interest rates and remove interest caps. This has the positive effect of slowing new construction, but also increases financing costs on existing properties. If interest rates are raised high enough, this can cause potentially painful losses.


As the bid ask spread in property prices becomes too wide, market liquidity can become low or nonexistent, preventing landlords from cutting their losses easily by selling. Property owners stuck in this situation either need deep pockets to ride out the recession, or forced to make a distress sale leading to catastrophic losses. Since real estate is a large part of the overall economy, the entire economy suffers, which accelerates the real estate recession dynamics. Foreclosures begin to occur, and may even begin to accelerate. At this stage, shrewd investors and funds pick up real estate bargains. The market bottom doesn’t occur until new constructions and completion cease, or demand grows higher than the new supply being added.

Some analysts claim that Recession has already started while others believe that recession is close. However you look at it, real estate sector is highly unpromising in the coming years. In the residential sector, most projections show that performance will remain flat. Commercial office overview for 2019, analysts forecast a decline of the average rental yield to eight per cent as a result of oversupply, with the average occupancy rates expected to decrease by at least 1.5 percentage points.


Further, in retail, returns are expected to stagnate as a result of increased supply. The average expected trend is that occupancy rates are expected to decline leading to reduced yields and values due to oversupply and reduced demand.

The beauty of market cycles is that there are always opportunities for those who understand the market and make rational decisions. During recessions, many opportunities are created for those who want to make a long term investments looking for bargains. They have to take a position which they will capitalize in the medium to long term when the market cycle will enter the recovery and expansion phase.

Real estate, just like any other investment, involves risk as it is based on a risk return trade off. Investors need to seek for professional assistance in order to make the right decisions and understand correctly the market dynamics and the risks involved rather than following rumors which usually lead to irrational and risky choices.

Source: Kioleoglou kosta






Vancouver is on pace to lose its status as Canada’s second largest housing market to Montreal.

While still Canada’s most expensive city for housing, a recent collapse in sales has led the value of real estate transactions substantially lower. That leaves Montreal’s soaring market poised to overtake the Pacific coast city’s.

In January, the total dollar value of real estate transactions in Vancouver fell to C$1.7 billion ($1.3 billion) on a seasonally adjusted basis, the weakest level since 2013 and down 42 percent from a year earlier, according to data released Friday by the Canadian Real Estate Association. Meanwhile, the value of transactions in Montreal reached C$1.63 billion to start the year, an increase of 18 percent from last January. Montreal — which has much cheaper homes, but more transactions — hasn’t been this close to Vancouver since 2008.


Montreal is the business capital of the largely French-speaking province of Quebec and Canada’s second largest city by population. But it was left out of the boom that saw home prices in Toronto and Vancouver surge to levels that made those cities unaffordable and prompted a rush of regulations to slow down them down.

Housing Heat Creeps East

Vancouver’s real estate market is about to be overtaken by Montreal’s

These measures have included new regional taxes on foreign buyers in Toronto and Vancouver that aren’t in place in Montreal. Higher interest rates and tougher rules for mortgage lending also seem to be having the biggest effect on the country’s priciest markets.

January saw home sales in Montreal climb the fastest in a decade as lower prices and a booming economy lured buyers. Sales in the city advanced 7.1 percent from December, the fastest pace since May 2009, and the number of units sold reached a record. Montreal’s gains are well ahead of identical moves in Vancouver and Toronto where sales rose 1.2 percent, and double the national increase of 3.6 percent.


There’s far less concern Montreal will show the signs of overheating seen in Canada’s two other major cities, given price differentials.

“Much of the recent price appreciation and sales increases, that really reflects the strength of the economy,’’ Marc Desormeaux, an economist at Bank of Nova Scotia, said by phone from Toronto. “Montreal remains relatively affordable.’’

Montreal’s benchmark home price was C$349,300 in January, up 6.3 percent from a year earlier. That’s still far less than the Vancouver price of C$1.02 million, which is down 4.5 percent.

Canada’s largest city Toronto still has by far the most real estate transactions, reaching C$5.4 billion to start the year, albeit greatly reduced from the C$8.5 billion in activity seen at the beginning on of 2017.

Source : Bloomberg

FG orders border to be reopened

The Federal Government has announced that all borders initially scheduled to be opened at noon on Sunday should now be reopened noon today (Saturday )

The nation’s border was shut down ahead of the Presidential and National Assembly elections earlier scheduled to hold today.

The Independent National Electoral commission (INEC) had at midnight on Feiday postponed the elections by one week.

Sequel to the postponement, the Comptroller General of Immigration, Muhammad Babandede, in a statement he personally signed said that the Minister of Interior, Abdulraman Danbazau has ordered that all borders be reopened due to the postponement of the elections earlier scheduled to hold today, February 16, 2019.

He said that the Nigerian Immigration Officers will now continue their normal border conrrol duties to ensure that all persons crossing the nation’s land, air and sea travel with a valid ans genue document and also pass through recognized routes.

Mixta Nigeria lists N5.28bn bond on NSE

Mixta Nigeria has listed a 5.28billion naira bond on the Nigerian Stock Exchange. The real estate firm noted that the funds from the bonds will be directed towards the creation of affordable housing. Kola Ashiru-Balogun, Managing Director at Mixta Nigeria joins CNBC Africa to discuss the details.



Top 10 reasons why borrowers pursue a jumbo reverse mortgage

American Advisors Group has surveyed borrowers who have chosen its private-label AAG Advantage loan to determine what prompts seniors to pursue a jumbo reverse mortgage.

The results highlight the vast differences between the average reverse mortgage borrower – whose financial situation is often tenuous – and those who pursue a jumbo reverse to access the equity in a higher-value home.

AAG, which currently dominates the reverse mortgage space with 25% of market share, rebranded last year as a provider of home equity solutions and expanded beyond reverses into traditional mortgage products and real estate services.

In addition to the Federal Housing Administration’s HECM, the California-based lender offers borrowers access to up to $4 million in equity in one lump sum through its non-agency jumbo reverse mortgage.

While the loan is billed as the AAG Advantage and sold through the lender’s retail channel, it is actually the HomeSafe Standard loan offered by Finance of America Reverse. In March, the two lenders announced a partnership that would allow AAG to sell the HomeSafe under its own branding on a correspondent basis.

AAG said it has seen significant traction with the loan.

“Consumer response to the jumbo product has exceeded all of our expectations,” said an AAG spokesperson. “There seems to be a real market for reverse mortgages with affluent seniors, especially those seeking to liquidate some of their real estate wealth.”

The lender said the average borrower for its jumbo loan is 77 years old, has a credit score of 729 and owns a home valued at $1.7 million. It pinpointed the average loan amount at $665,000.

AAG explained it surveyed 250 Advantage borrowers to revealed the main reasons why seniors pursue a jumbo reverse, shedding light on how originators can better market the product. Here they are:

Top 10 reasons seniors chose a jumbo reverse mortgage:

  1. To make home modifications or repairs
  2. To buy an investment property or a vacation home
  3. To help children purchase a property
  4. To provide children with an early inheritance
  5. To create college funds for grandchildren
  6. To establish a trust fund
  7. To cover in-home care costs
  8. To have more financial liquidity
  9. To maintain their current lifestyle
  10. To pay off other debts

“Jumbo reverse mortgage loans present an opportunity for older Americans to achieve greater financial comfort and expand their wealth,” said Paul Fiore, chief retail sales and operations officer for AAG. “Products like Advantage have emerged as an optimal option for affluent homeowners who have a desire to diversify their capital and invest in other aspects of life.”


Five things you need to know about homelessness

Homelessness is rising sharply and councils, charities and private companies are working to find emergency solutions. Videos produced by Inside Housing and sponsored by Mears outline the scale of the challenge.

More and more households are living in temporary accommodation in England. In fact the number has increased 65% since 2010, according to official statistics.

Watch the video below outlining five things you need to know about the homelessness crisis, including information about what you can do to help.



How long do Nigerians have to wait for affordable mortgage?

Edward Okon is a middle-aged man who left higher school 26 years ago at the age of 24. Okon’s immediate plans on leaving school were to work for six years and marry at the age of 30. Thereafter, he would start processes leading to owning a home he would call his home before his 40th birthday.

That was a long term plan because he reasoned that the only easy, simple and convenient way for him to own a home from his not-too-big salary was to take a mortgage loan and pay back by installments.

Because of its low-interest rate and long repayment period of 6 percent and 20-30 years respectively, Okon decided for the National Housing Fund (NHF). He approached one of the primary mortgage banks (PMBs) to subscribe for the fund. His experience there was anything but cheering.

After subscribing and contributing for one year instead of the statutory six months requirement, Okon’s long trek to obtaining a loan via his contribution began. His PMB made impossible demands from him, leading to his anger and decision to suspend his application for the elusive loan.

That was how Okon’s faith in his country’s mortgage system almost died and his dream of owning a home through mortgage was deferred.

Though, through frugal living and co-operatives, Okon has been able to build his housing, a modest three bedroom bungalow in a Lagos suburb, his interest and hope in the Nigerian mortgage system came alive again when the Federal Government, in another round of intervention, set up the Nigerian mortgage refinance company (NMRC) in 2014.

NMRC was launched into the Nigerian mortgage market as a secondary mortgage institution aimed to raise liquidity in the mortgage system and drag down the interest rate on mortgage loan to an upper single digit or a spread of double digits. Its operation was also expected to catalyze the development and delivery of affordable housing to Nigerians within the low-income bracket.

It is a private sector-driven company with the public purpose of developing the primary and secondary mortgage markets by raising long‐term funds from the domestic capital market as well as foreign markets for providing accessible and affordable housing in Nigeria.

The company whose mandate is mainly to increase liquidity in the mortgage system by refinancing mortgages originated by the primary mortgage banks (PMBs) came on a very high pedestal of providing cheap and long term funds, reducing interest rate to single digit, increasing the country’s housing stock by 720,000 annually, and creating 300,000 indirect jobs.

To Okon and many other Nigerians, particularly the mortgage operators, this was a new dawn because the company would issue long term bonds in the capital market as efficiently as possible and channel the proceeds to refinance member-institutions at a competitive rate, bringing to an end, or reducing to the barest minimum, the huddles posed to mortgage lending to real estate.

True to this expectation, NMRC has visited the capital market from where it raised N8 billion with which it has refinanced mortgages originated by six mortgage institutions including Stanbic IBTC, Imperial Homes, Sterling Bank, Sun Trust Mortgage Bank, Trustbond Mortgage Bank, and Homebase Mortgage Bank which got N1.8 billion, N1.7 billion, N1.6 billion, N1.3 billion, N700 million and N500 million respectively.

It has gone back to the market and raised more capital. By the end of last December, the company announced to the world that it has raised N18 billion from the market.

But it remains to be seen by Okon and his brothers and sisters what purpose this refinancing function has served Nigerians, four years after. The effect of the refinancing of the six mortgage institutions is yet to be felt in the housing sector as there is no news anywhere of any mortgage loan applicant, especially NHF contributors, that have been given loans to buy, build or renovate houses as a result of this.

The second capital raise by the company raised expectations that more mortgage institutions, especially the PMBs, will be refinanced and more mortgage applicants will be able to access mortgage to buy or build their homes.

Click here to watch weekly episodes of our Housing Development Programme on AIT

Officials of the company assured that when they raised another capital, it would come at a lower interest rate and PMBs will be able to access the funds at a lower interest rate, if not at single digit, at least, at lower double-digit.

However, Femi Johnson, MD/CEO, Homebase Mortgage, explained in an interview that it took the company this long to return to the capital market because the Securities and Exchange Commission (SEC) requires it to have expended about 70 percent of the earlier capital before returning to raise more capital.

The high-interest rate has been the bane of mortgage access for home ownership in Nigeria as many mortgage applicants and home seekers cannot afford the commercial interest rate of between 20 percent and 25 percent charged on mortgage loans with very short repayment period.

The role NMRC is expected to play in this direction is to provide liquidity for the mortgage market and, consistent with its mandate to promote wider spread of home ownership, accessibility, and affordability, the company has come with some initiatives that have also failed to show impact.

The ‘Housing/Mortgage Market Information Portal (MMIP)’ is one of such initiatives aimed to enable it to gather data for intelligence and profiling of federal, states civil servants and informal sectors (off-takers) for affordable housing.

Another initiative is the Mortgage Market System (MMS) which is a transformational change that integrates the entire housing market, covering construction finance, primary and secondary mortgage. The system which is available to all players in the housing industry has the benefit of removing duplications of effort in gathering data and documents; improving the turnaround time, reducing the cycle time of transactions and helping in making homes more affordable.

But, affordable housing is made possible more by an affordable mortgage which is not available at the moment. And Okon wants to know how long he has wait to see and access an affordable mortgage.

Source:  Chuka Uroko

Akwa Ibom Govt Commences Construction of Modular Classrooms

Government of Akwa Ibom state has commenced the construction of sixty modular classroom blocks across the 10 federal constituencies in the state.

The state’s Commissioner for Education, Prof. Victor Inoka who disclosed this to journalists in Uyo, noted that the government taught it wise for students in public schools to enjoy a feel of what students in developed countries who have modular classrooms enjoy.

Click here to watch weekly episodes of our Housing Development Programme on AIT

He said the classroom blocks regulate temperature according to the weather condition, and that the classrooms are cool when the temperature is hot.

He further explained that the classrooms are fitted with gadgets to access information across the world. Adding that there is no need for air-conditioners in the classrooms.

The classrooms he said will accommodates 30 students and a teacher, adding that it is resistant to fire.

“Sixty schools are proposed for the project. It is supposed to be 60 modular classroom blocks in the 10 federal constituencies of Akwa Ibom. This is the first phase of the project, the materials are complete and ready for use.

“We have done four in Uyo High school, Oron road, one at Etoi primary and secondary schools. There are two at Onna local government areas, we have built and completed it.


Others are spread across the 10 federal constituencies in Akwa Ibom.

“The essence is for the students to feel what other students in civilised countries such as America, Britain, China, Korea etc. feel. The classroom blocks regulate temperature to be moderate according to the weather condition. It is fire resistant.


“It can be cool when the temperature is hot without air conditioner. With the gadgets you access anywhere that is what we want to do here. The normal classroom is 30 students to a teacher.

“The equipment for the modular class room blocks were ordered from Turkey. The experts came to assemble it from Turkey; most of the equipment are in the Ministry of Education warehouse,” he said.


Mortgage rates drop below 4.5%. Homeowners scramble to refinance

Lowest rates in 9 months

There is a quiet refinance boom brewing, as mortgage rates sink to 9-month lows.

Not since April 2018 have rates been this low.

Freddie Mac, in its weekly mortgage rates survey, reported that the average 30-year mortgage rate hit 4.45%, sinking below the psychologically important 4.5% mark.

What’s more, rates have come down from highs near 5% seen as recently as November.

That drop represents a savings of $90 per month on a $300,000 mortgage.

Consumers a flocking to refinance. No one knows how long this good fortune can last.

Refinance applications surge 35% on low rates

The Mortgage Bankers Association (MBA) probably had to check numbers twice when they saw the results of this week’s mortgage applications index.

The data showed that refinance applications spiked 35% in one week.

Falling rates snuck up on the American consumer. While everyone was enjoying the holidays, mortgage rates fell precipitously starting the week before Thanksgiving.

Rates continued dropping through Christmas and New Year’s Day until, on January 10, they hit levels not seen since last spring.

Joel Kan, the associate VP of economic industry forecasting for MBA, said, “Mortgage rates fell across the board last week and applications rebounded sharply, after what was a slower than usual holiday period.”

Now, it appears, consumers are hearing about low rates and finally acting.

Those who have been priced out of a refinance or home purchase are finding out that a new mortgage finally makes sense.

15-year fixed and 5-year ARMs drop into the 3s

The 30-year fixed rate gets all the attention, but other types of mortgages should be making headlines, too.

Rates for 15-year fixed and 5-year ARM loans are now in the 3s according to Freddie Mac.

  • 15-year fixed: 3.89%
  • 5-year ARM: 3.83%

These alternatives to the 30-year give homeowners the opportunity to secure pre-2018 rates — before rates started spiking in earnest.

For instance, someone buying a home may have found they could no longer afford monthly payments at today’s 30-year fixed rate.

But they choose a 5-year ARM rate instead and shave more than $100 per month from today’s 30-year payment.

Five-year ARMs are fixed for five years, then start adjusting based on the market. These loans are perfect for homeowners who plan to stay in their homes only 5-7 years.

Those who are impressed at today’s dropping 30-year rate will find short-term rates even more enticing.

How do I check my rate?

Mortgage rates suddenly turned low again, sparking a new interest for home buyers and refinance applicants alike.

Each applicant, though, needs a personalized rate quote. Average rates are only that — an average. Your rate might be higher or lower depending on credit score, down payment, home equity, or other factors.


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