Number of mortgage loans in Kazakhstan increased 19 percent in 2018

ASTANA – The number of home loans issued in Kazakhstan grew 18.9 percent in 2018 over 2017. The total portfolio of loans issued grew by 3 percent in the same time period.


The mortgage loans grew 1.8 percent and reached 1.3 trillion tenge (US$3.44 billion) in just December 2018, according to a report by In December 2018, Astana and Almaty saw 25.5 percent and 26 percent growth respectively. More rural areas saw growth of approximately 3 percent. The Kostanai Region had a 5.8 percent increase (40.6 billion tenge or US$107.31 million), the Aktobe Region had 3.3 percent (to 73.7 billion tenge or US $194.8 million) and the West Kazakhstan Region had 3 percent (44.9 billion tenge or US$118.68 million).

The Zhilstroysberbank (House Construction Savings Bank) of Kazakhstan (HCSBK) remains the biggest issuer of the loans for the purchase of housing in the system of housing savings. The share of financial institution loans from the country’s mortgage portfolio was 51.4 percent in 2018 against 42.4 percent in 2017.

In response to a high demand for bank services in the West Kazakhstan Region, the HCSBK opened a new branch in Uralsk in December. To date, 68,600 residents of the region, that is, every tenth citizen, are saving up for future housing. The amount of savings has already reached 34.6 billion tenge (US$91.45 million). The branch issued 11,700 loans (59 billion tenge or 155.94 million).

Since the launch of Nurly Zher state programme in the end of 2016, in the West Kazakhstan Region, 1,200 apartments were sold for approximately 10 billion tenge (US$26.43 million). In 2018, 480 apartments for 3.7 billion tenge (US$9.78 million) were sold. This year, the state programme plans to commission another 1,100 apartments with a total area of ​​62,400 square metres.

In addition, the commissioned volume of housing in square metres has been growing steadily year by year and reached 12.5 million square metres in 2018, against 11.2 million square metres in 2017.

Global cement body unveils women network

As part of the activities to mark the International Women’s Day, the Global Cement and Concrete Association inaugurated Concrete Industry Women’s Network to attract more women into the sector.

The sector initiative, inaugurated by the GCCA Cement Director, Claude Lorea, aimed at establishing a network of women leaders and experts in the cement and concrete industry and its suppliers, in order to promote gender diversity.

The network, which started informally at the beginning of last week, had already attracted more than 100 women who registered, the association said.

Lorea said, “The sector is well aware that there is a lot more to do to attract women to our industry.

“As a matter of principle, improving gender diversity and equity is important, as well as ensuring that girls at school are attracted to the range of professions and careers we can offer.

“Importantly also, more and more studies show that companies with diversity at senior levels perform better generally and across all three sustainability pillars – economic, environmental, and social.”

The group, according to the association, is a place for women working in the cement and concrete industry to share content, thoughts and ideas among peers, with the shared mission of promoting concrete as the sustainable building material of choice.

It added that the group wanted to establish a network of women leaders and experts in the cement and concrete sector and its suppliers in order to ensure gender diversity, for example in conference panels, by providing a ready network of talent and experience, and to create a culture of diversity across the industry.


Source: punchng

4BN Maitama market inaugurated in abuja

The Federal Capital Territory Administration has inaugurated the remodelled Maitama ultra-modern market in Kubwa, a satellite town in FCT, two years after the project took off.

The N4bn market which was constructed by H & I Construction Limited, consisted of 1,467 shops, warehouses and cold rooms of various sizes.

Speaking during the ceremony, the Chairman, Bwari Area Council, Mr Musa Dikko, explained that the idea of building the market was conceived about 10 years ago.

He commended the contractor for delivering the project within two years.

Director of H & I Construction Limited, Mr Rabiu Sa’id, said that facilities in the new market include generous parking space, a police station, bank, and 50 toilets located at strategic locations in the market.

He disclosed that his firm would soon commence the remodelling of Mpape Market in conjunction with Bwari Area Council, adding that the modernisation of the Utako /Jabi Motor Park and Utako Market would take-off in two weeks.

Sa’id said, “We will also commission the first phase of the modernisation of Utako Market in FCT in about two weeks from now, while on the same day, we will perform the ground-breaking ceremony of the modernisation of the Utako/Jabi Motor Park, Abuja.

“The second phase of Garki Market modernisation will also be done in conjunction with Abuja Market Management Ltd before the second quarter of this year.”

Sai’d further said the company had built a new palace for the district head of Kubwa, noting that work had also commenced on the construction of a new town hall for the community.

Source: Adelani Adepegegba


5 steps to buy a house, for first-time home buyers

Finance is one of the most important determinants, when it comes to buying a house and most of the other considerations revolve around this.

As a property purchase is often a once-in-a-lifetime decision, it is essential to evaluate your funds accordingly. To buy a house, one nowadays has to utilise their savings and also opt for a home loan. T

he process of taking a loan has also become simpler, with a majority of people opting for it. Nevertheless, there are some basic principles that one can follow, to plan your finances for buying a house this year.

1. Pay off all your existing debts

You can never assess your net worth, if you are debt-laden. Any partial payment towards this debt, will show up poorly in your credit ratings and this may affect the home loan process.

Paying off your debts completely, will help you move ahead in the direction of home buying. Besides relieving one’s tension, it can help you to properly allocate money for your basic needs and for your big real estate purchase.


2. Invest in multiple assets

One should learn about the different financial instruments available in the market. This can help you to invest your money wisely and use the returns, to fund the purchase of your home.

Financial experts always stress on having a mix of different asset classes in one’s portfolio, as this will help you during big-ticket purchases, like property.

“Before making the decision to buy a house, one needs to ensure that the current asset allocation is not skewed towards a risky asset class like equities.

If that is the case, one needs to shift a chunk of those assets to less risky ones that are also liquid. Mutual funds can be a great avenue for such temporary parking of funds,”


3. Track your spending

Real estate is an expensive investment. However, with modern buyers being exposed to global standards, they refuse to settle for anything but the best.

In such a scenario, every penny counts. Experts suggest that an individual’s monthly budget should be based on the 50/30/20 thumb rule, where one spends 50 per cent on basic necessities, including groceries, utilities, medical expenses, etc., 30 per cent for indulging yourself and your family, while the remaining 20 per cent should be saved.

This 20 per cent will help you in your down payment, getting home loans and also in case of any other emergency.

“After following the real estate market for the last three months, for buying our own apartment, we found something better than what we were looking for.

So, we are trying to channel our funds in this direction. Buying a house requires a huge amount of self-control, to avoid spending money on other temptations and instead, develop a habit of saving money for buying an apartment,” says Vihaan Verma, a house hunter from Delhi, who intends to buy an apartment this year.


4. Standing instructions for automatic transfer of money

Initiate standing instructions at your bank, for transferring money from your salary account to your savings account, every month.

This will keep you in check and you will only spend what is left after savings. Going forward, when you take a home loan, you can follow the same method, so that monthly EMIs are taken care of, right at the beginning and you avoid getting into any financial mess.


5. Maintaining a balance between rent and EMIs

Proper planning is especially important, when one plans to buy a house while also living in a rented accommodation. This will entail an outgo of EMI, as well as the rent for your current house.

“Once you avail of a home loan, the EMI starts immediately. This can become a burden, when you are paying it along with the rent for your current house.

You have to maintain a proper balance, between the EMI and the rent, so that once you get the possession of the new house, you can increase the EMI amount and move into your dream home. In 2019,

there is hope of a reduction in the Goods and Services Tax (GST) for real estate, as well as further reductions in the repo rate, which will directly reduce the pressure of repayment on buyers. In the meantime,  buying a ready-to-move-in property can be a viable option, as this will enable you to avoid the rental outgo and the GST,” advises Harvinder Sikka, MD of the Sikka Group.


Fund allocation, for buying a dream home

  • Plan the monthly budget using the 50/30/20 thumb rule, where you spend 50 per cent on basics, 30 per cent on luxury and the remaining 20 per cent towards savings.
  • Change your asset allocation predominantly from risky assets to liquid assets, so that when you zero-in on a property, you can immediately proceed and not let go of an opportunity because of unavailability of funds.



Nigeria: Pertinent Questions On Legal Title Of Real Estate Development Under The Private Public Partnership In Nigeria

Like in other developing Countries, in Nigeria, there are instances where the government at the Federal, State or even Local may partner with private entities who have the expertise and finances under the Private Public Partnership (“PPP”) for the purpose of developing public infrastructure or a specialized project on behalf of the government. This is achieved through agreement between the government and the private entity which details the rights and obligations of the parties.

The common type of PPP agreement for real estate development is a Development Lease Agreement (“DLA”). Under DLA, the government grants the private entity the right to develop a real estate for a stipulated period with a provision for the developer to nominate purchasers of portions of the real estate for issuance of a Certificate of Statutory Occupancy (“C of O”). We shall address pertinent questions on legal title which may arise from a DLA.


How does a DLA for real estate development work?
Usually, the government grants a lease over an expanse of land to a private developer (“the developer”) for a stipulated period with an option to renew. This means the developer is to develop the land within the stipulated period and its lease over the land will expire at the end of the period and all its infrastructural improvements on the land will revert to the government.

Under the DLA, it is the responsibility of the government to issue the C of O to any person who the developer nominate to have rights over development on the land within the stipulated period in the DLA. This means the developer’s right to nominate persons for issuance of C of O will expire at the end of the stipulated period.

The DLA does not envisage the developer assigning the remainder of its interest on the land under the DLA to purchasers but to develop the land and nominate persons to the government who shall issue C of O to purchasers for the usual number of years for grant of fresh allocations. For the purpose of the DLA, the developer does not have legal title over the land but a development lease over the land for the stipulated period.

Legal title on the land is vested in the governement from the commencement of the DLA till its expiration. Under the DLA, the developer is a partner of the government to develop the land on behalf of the government. The developer’s gain under the DLA is the development and sale of housing units on the land throughout the stipulated period.

Why would the government grant lease for a number of years to purchasers nominated by the developer which exceeds the stipulated period of the developer’s development lease? This is a massive contradiction and guarantees future problems.
The developer’s lease is for development of the land and nomination of purchasers purposes only. The government only granted a development lease to the developer over the land and not an outright title on the land. Legal title on the land is still vested in the government throughout the stipulated period in the DLA and afterwards. Therefore, the government has the liberty to grant lease to purchasers over and above the stipulated period of the development lease in the DLA.

Is the government legally justified to grant higher number years of lease to purchasers more than the stipulated period for the development lease in the DLA? The government may revoked the C of O once it discovers this discrepancy.
The government did not by the DLA, grant legal title to the developer over the land for the stipulated period. The government only granted a development lease to the developer. The government is merely using the technical and finances of the developer to develop the land. Legal title to the land remains with the government. Thus, the government is legally justified to grant higher number of years of lease to purchasers more than the stipulated period for the development lease in the DLA.

There is no guarantee that current or future government is bound to issue any C of O in contradiction to DLA. It is actually illegal.
All lands in Nigeria is vested in the relevant government. It is usual for the government to grant a specific term for fresh allocation. Purchasers nominated under the DLA are fresh allotees and the government is contractually bound to issue a C of O to them for the customary term for fresh allocation. Hence the issuance of C of Os for the purchasers for the customary term cannot be said to be illegal.

The DLA envisages that the purchasers will hand over the property to the government upon expiration of the stipulated time in the DLA.
It is the developers’ development such as roads, electricity, drainages, sewages and other infrastructure improvements on the land that will revert to the government at the expiration of the stipulated period in the DLA and not the title of purchasers duly nominated to the Minister under the DLA.

Would different owners of a property, for instance where different persons own each floor of the property, be issued their respective C of O for the floor they own?
The developer may make arrangement with the government for issuance of C of O to the respective owners of different portions of a single property.

However, if this is not possible, the developer may furnish the respective owners with the Global C of O of the entire property and a duly executed Deed of Sublease showing the portion of the property in which they own.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

I will provide details of corrupt contractors – Fashola

The Minister of Power, Works and Housing Babatunde Fashola, SAN, has written to Socio-Economic Rights and Accountability Project (SERAP) promising “to refer the request for details of alleged contractors and companies that collected money for electricity projects and failed to executive any projects to the Ministry’s agencies for necessary action and appropriate response.”


Fashola’s latest response followed his letter to SERAP last month in which he said: “We have searched the Ministry’s record and the information you applied for is not held by the Federal Ministry of Power, Works and Housing (Power Sector).”

However, SERAP disagreed with the response, saying: “The public expectation is that government information, when in the hands of any public institutions and agencies, should be available to the public, as prescribed by the FOI Act. The FOI Act should always be used as an authority for disclosing information rather than withholding it.”

In his response to SERAP’s reaction, Fashola said: “The Ministry’s letter to your organization was not an attempt to deny the request for information. The Ministry is committed to compliance with the Laws of Nigeria including the Freedom of Information Act, 2011. The Ministry will refer your request to its agencies for necessary action and appropriate response.”

Fashola’s letter dated 4th March, 2019 and signed on his behalf by Louis O.N. Edozien, Permanent Secretary (Power) read in part: I write to acknowledge the receipt of your letter dated 8th February 2019 which is in response to the Ministry’s letter dated January 2019.”

“There may be instances of part-payment against certification of commensurate value for materials and services in achieved contract milestone even though the entire contract is not 100% performed.”

“But the Ministry does not have a record of any contractors that collected 100% payment and failed to execute a contract. The Ministry’s procurement and contract administration processes are strictly guided by relevant regulations that require the Ministry to ensure Advanced Payment is limited to 15% of the contract sum and is backed by an Advanced Payment Bank Guarantee (APG).”

“Our regulations also require the Ministry to release any APG only after recovery of commensurate value of contracted materials and services from the contractors who provided the APG. We make payments only upon certification of receipt of commensurate value for materials and services from the contractor.”

SERAP deputy director Kolawole Oluwadare said: “We welcome Fashola’s latest response, and look forward to the Ministry’s agencies getting to the root of the matter by publishing without further delay details of alleged corrupt contractors and companies, as contained in our FOI request.”

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It would be recalled that Fashola had earlier said in response to SERAP’s FOI request that: “the Ministry has searched for the requested information on details of alleged contractors and companies that collected money for electricity projects and failed to executive any projects, but we could not find it from our records.”

Fashola’s initial response followed SERAP’s FOI request and suit number FHC/L/CS/105/19 filed last month at the Federal High Court, Ikoyi, Lagos. The suit is seeking “an order for leave to apply for judicial review and an order of mandamus directing and/or compelling Fashola to provide specific details on the names and whereabouts of the contractors who collected public funds meant for electricity projects but disappeared with the money without executing any projects.”

SERAP’s reaction to which Fashola has now responded read in part: “Indiscriminate attempts to limit disclosure of information of public interest such as the details of the names of alleged corrupt contractors and companies that SERAP is seeking, will undermine the government’s expressed commitment to transparency and accountability.”

“We believe that the predisposition by all public institutions and agencies including the Ministry of Power, Works and Housing should be to grant access to public information and not to implicitly deny it. Indeed, disclosure, not secrecy, is the dominant objective of the FOI Act. This objective would be defeated if there is public perception that public institutions and agencies attempt to shield information of public interest from disclosure or abdicate statutory responsibilities.”

“Although we have filed a case in court for remedial action and seeking an order to compel you and your Ministry to release the information requested, we urge you to take proactive steps to obtain the information from any other public institution or agency that may be holding the requested information, and to send to us the information without further delay. Your Ministry should not wait until the court makes it decision to compel you to disclose the requested information.”

“SERAP believes that it should be the practice of your Ministry and indeed other public institutions and agencies to hold and keep records of public information including on names of alleged corrupt contractors and companies with the expectation to release any such information when requested.”

“SERAP believes that even assuming that your Ministry has faithfully searched for the information requested and that the information is not held by your Ministry as claimed, your Ministry should still have taken steps to approach and request from other public institution or institutions that may be holding the requested information, in line with the provisions of the FOI Act.”

“SERAP believes that your response implicitly amounts to a refusal by your Ministry to provide the information requested, as allowed under the FOI Act.”

“We note that your Ministry has a responsibility under Sections 1(1)(2), 2(2)(3)(4), 5 and 9 of the FOI Act to record and keep information about all its activities, operations and businesses, including on the specific names and details of alleged corrupt contractors and companies in order to facilitate public access to any such information.”

National Housing Bank plans stronger capital norm for housing finance companies

The draft amendments has proposed raising the CAR to 15% in a staggered manner by March 2022, while suggested a higher cap on borrowing.
KOLKATA: National Housing Bank (NHB) is planning to raise long term capital requirement for housing finance companies (HFCs) to guard against their liquidity and solvency risks.


The housing regulator has proposed to raise their capital adequacy ratio to 13% by March 2020 from 12% now as a fallout of the IL&FS-led crisis which forced several specialised home loan lenders, especially the smaller one, to slow down business to preserve liquidity.
The draft amendments has proposed raising the CAR to 15% in a staggered manner by March 2022, while suggested a higher cap on borrowing.

“HFCs are exposed to risks arising out of counterparty failures, funding risks and risks pertaining to liquidity and solvency as any other financial sector player. There is thus a need for a review of the regulatory framework of HFCs,’ NHB said in a note to stakeholders.

Most of the bigger HFCs carry sufficient capital to meet the proposed norm, experts tracking the sector said.

NHB has sought comments on the proposals by March 31.
The regulator also wanted to reduce borrowing limits for HFCs in graded way. It proposed the cap on borrowing at 14 time of net-owned fund by March 2020, 13 time of NOF by March 2021 and 12 times by March 2022.

“This was not unexpected following the IL&FS crisis. The regulatory restriction will now shape how much leverage housing finance company or NBFCs can take. This may impact smaller HFCs or those with high leverage ratio,” HDFCNSE 0.20 % chief executive officer Keki Mistry told ET.


He however said that HDFC would not be impacted for the next seven/eight years the the nation’s largest housing finance company has about 19% CAR and as far as leveraging is concerned, its debt-equity ratio was 4.7 times as on December.

“Most of the HFCs would be able to meet the revised norms on CRAR, as most of the HFCs which are nearing 15-16% CRAR and would have adequate cushion to raise Tier II capital and shore up the CRAR, if required.” said Supreeta Nijjar, ICRA’s head for financial sector ratings.
“Also, the capital adequacy for HFCs is supported by the lower risk weights on smaller ticket size home loans which is the growth area for most HFCs,” she said.

Expect a 15% growth in housing loan disbursements

The yields have gone up as compared to last year and this has also translated into a good growth in our net interest income also, said Vinay Shah, MD & CEO, LIC HousingNSE 1.15 %, in an interview with ET Now.


Edited excerpts:

Given the heightened liquidity concerns over the past couple of months, how do you assess the entire situation vis-à-vis what we saw in October?
The liquidity position as compared to October-November has eased quite a lot. We are finding that it has eased both in the short tenure as well as longer tenures funds. But in October also, getting money was not a problem for our company as being a AAA rated company we are getting money though at slightly higher rates. Now it has eased substantially. Every year during the second fortnight of March, there is some tightening because of advance tax payments and other things but that is an annual thing. Now the position is fairly good.
Calculated spreads have also declined. What led to this decline and especially the decline that one has seen in the yields for LIC Housing Finance?

On the contrary our spreads have been stable. Last year starting April onwards till the 1st of January, we increased our lending rates by 70 bps and this has been transferred to whole of our back book. About 80-85% of the book is on floating basis. We have had similar spreads and we did not have much of decline as far as the spreads go.
Can you just tell us what the outlook is on your borrowing mix change? Given the high proportion of NCDs, how do you see borrowing costs in your spreads shaping up?

Borrowing cost have gone up from last year levels. We have to see if going ahead, the rates remain stable. There has also been some benefit from the RBI repo rate decrease also. If the rates remain stable, the margins would be at the same level or they may improve also. The yields have gone up as compared to last year and this has also translated into a good growth in our net interest income also.

There has also been sharp increase in the builder loan growth despite high delinquencies. What is the rationale for this high growth given the high stress scenario in real estate?

During current year, builder growth looks very high. The main reason is that we are operating at a very small base and out of about 246 odd accounts which we are servicing, four or five accounts constitute the major chunk of the delinquent NPAs.

Secondly, the full book of our builder loan portfolio is only about 6%. In the NPAs also I see resolution coming in most of them. It may take some time in between but we are very sure that the resolutions will come. The comforting fact is that there is the underlying security that we have. Recently in Q2, we had made one recovery wherein we recovered the full principal and not only that the major part of the interest.
There has been some signs of struggling growth in home loans. When can we expect a pickup?

The real estate sector in the last two-three years has faced many challenges starting from demonetisation, RERA, GST followed by liquidity crunch in Q3. But of late, things are picking up. We expect better growth throughout the country because of two reasons – one is the lowering of the GST rates on under construction projects and the number two is the continuity of housing subsidy which the government has now extended till March 2020.

I expect a good pickup there. The market sentiment is improving and going ahead, I would still see a growth rate of around 15% in housing loan disbursements.

How mortgage system helped home ownership in Saudi Arabia

Housing Minister Majid Al-Hogail: The private sector’s contribution to mortgage financing did not exceed 35 percent in the past whereas it has reached 100 percent today

RIYADH: The second edition of the Saudi Housing Finance Conference concluded in Riyadh on Wednesday.
Housing Minister Majid Al-Hogail stressed that the mortgage finance sector in the Kingdom will play a significant role in increasing the ownership rate, reaching 70 percent by 2030.

He emphasized that the mortgage finance sector is undergoing significant growth; last January, more than 9,000 housing finance contracts worth more than SR4.7 billion ($1.25 billion) were signed.
He said: “The private sector’s contribution to mortgage financing did not exceed 35 percent in the past whereas it has reached 100 percent today. We also aspire for the investments in the mortgage finance sector to reach SR60 billion this year, which will facilitate ownership, benefiting from the available financing facilities for citizens.”
He noted the policies of the housing program where 16 government agencies work together to overcome obstacles that prevent their initiatives giving citizens the ability to own houses, especially policies related to financing and housing support.

Encourage local sourcing of building materials –Experts urge FG

In order to increase Nigeria’s gross domestic product and reduce the cost of owning a house in the country, some experts in the built industry have advocated a government white paper that will encourage sourcing of building materials locally.

Click Here to Read More About Abuja International Housing Show – The Largest Building and Construction Expo in Africa

According Mr. Aralu Okeke, the bane of building construction in the country is the government inability to encourage the manufacture and consumption of Nigeria made building materials. He said that because most government officials have the wherewithal to afford foreign building materials, they don’t care what the poor people suffer to get their own houses.

“The failure of the Federal Government of Nigeria to encourage local content in the country’s construction industry is slowing its growth. The industry, which is a major employer of labour, has been in slow growth due to a combination of factors which the local operators blame mainly on the domination of the industry by foreign firms,”he said.

Another respondent on the issue of local building materials, Mrs. Bimpe Lawumi said that Nigeria can make the best of laws but they don’t know how to implement the laws. This she said always creates vacuum in the supervision channels. The factors that militate against the growth of industry in the country makes Nigeria a dumping ground for all half baked materials.

“These factors also include but not limited to power factor, policy factor and phobic for local goods. Government of Nigeria should in the first place encourage local content as a way of creating jobs to the teeming unemployed youths. If government policies are friendly to all these, then the drive to increase urbanization would have gotten a positive facelift but the reverse has always been the case.

“Despite the lackluster attitudes of government, the rate of urbanization in Nigeria has continued to witness tremendous increase in the last five decades. Census in the early Fifties showed that there were about 56 cities in the country and about 10.6 percent of the total population lived in these cities,”she noted.

This, she said, rose dramatically to 19.1 percent in 1963 and 24.5 percent in 1985. Today, the national population is estimated to be about 197.4 million with the urban population constituting about 60 percent. “The phenomenal rise in population, number and size of our cities over the past few years have manifested in the acute shortage of dwelling units which resulted in overcrowding, high rents, poor urban living conditions, and low infrastructure services and indeed high crime rates.

“These are indicators that there is huge market in the country and that if consumers’ needs are met, the country will be exporting like China. But this is not to be because the taste for the indigenes are not within the country but for things manufactured exotically. This problems are not only in the building materials but also in the sectors especially in the automobile industry,” she concluded.

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