A silver lining: Most Americans still view housing as a good investment

A majority of Americans – 65% – think it is still a good idea to invest in a home, according to the latest survey of consumer expectations of housing by the Federal Reserve Bank of New York.

While this hasn’t changed much from last year, the attitudes of younger Americans have, as respondents from this generation were less enthusiastic about housing as an investment and a greater share of them labeled it a bad investment.

This gives credence to a recent Wall Street Journal article suggesting that that wave of Millennial homeowners everyone is anticipating may turn out to be no more than a ripple as a number of factors – including banks’ reluctance to make small loans and a general preference toward urban life – seemingly make homeownership less appealing for the younger set.

According to the survey, a majority of renters still think getting a mortgage is difficult, but things may be improving as the share of those who considered it easy rose above 21% for the first time in at least five four years.

Home price expectations have fallen, though, the survey revealed, with the one-year outlook down 1% from last year and the five-year outlook down nearly the same.

In contrast, rent expectations held steady, with the average one-year rent increase expectation hovering near 7.3%.

When it comes to homeowners, the probability of refinancing dropped from 8.8% last year to 8%, while the probability of investing at least $5,000 in the home over the course of one and three years remained at last year’s relatively high level, the NY Fed said.

Economists at the NY Fed said homeownership in the next decade will depend primarily on mortgage credit conditions.

“Barring a change in the economy, the nation’s aging population will likely push up homeownership since older households are historically much more likely to own,” they wrote. “Further, the majority of current renter households would rather own; nonetheless, tight credit and other constraints, including the high prevalence of student debt, mean that many of these same renters see it as unlikely that they will ever be able to enter into homeownership.”

“How these factors – demographics, preferences, and constraints – play out over the next decade will determine where the homeownership rate lands,” they concluded.

Source: By Jessica Guerin

New Mortgage Loans Slowed in Canada but Overall Value is Still Rising says CMHC

The number of mortgage loans in Canada grew at a slower pace in the fourth quarter as housing activity cooled, according to a new report from the Canadian Mortgage and Housing Corporation, but the value of all mortgages is still rising.

There were 223,000 new mortgage loans in the last three months of 2018, which is 4.8 per cent lower than the same period a year ago, the CMHC said.

“While indebtedness of Canadian households remains elevated, growth in the volume of mortgage activity slowed in the last quarter of 2018, partly reflecting lower housing market activity,” said Geneviève Lapointe, senior market analyst at CHMC in the report.

“Despite high debt levels, delinquency rates remain low and the number of highly indebted and more vulnerable consumers has decreased.”

Borrowers with a low credit score accounted for less than one per cent of new mortgage loans, the CMHC said.

But, even as the number of loans fell, the average value of all mortgages in Canada reached $209,570 in the fourth quarter, which is more than three percent higher than a year ago.

The CMHC said the national trends mirror what happened in Toronto and Vancouver — the country’s largest and most expensive housing markets.

While the number of transactions for home sales fell last year on higher borrowing costs, slower economic growth and recent mortgage regulations, the average house price in Canada is still “historically elevated,” the CMHC said.

“This explains, in part, why the average balance of new loans remains higher than in the overall mortgage market.”

Mortgages accounted for about two-thirds of all debt held by Canadians, according to the government agency.

On Tuesday, the International Monetary Fund (IMF) warned policymakers in Canada not to ease mortgage stress test rules introduced last year, because household debt remains high.

Mortgage holders take on more debt

Added to that, the CMHC said household debt rose faster than income last year — leading the debt-to-income ratio to hit a record high of 178.5 per cent in the fourth quarter.

A big driver of this was Canadians with mortgages taking on more debt, the CMHC said.

“Their average outstanding balance in credit cards and lines of credit grew at a faster pace than in 2017, except for HELOCs (home equity line of credit) and auto loans, which increased at a slightly slower pace,” the report said.

“These trends were also observed among consumers without a mortgage.”

Canadians with a mortgage had an average balance of $9,054 in other debt, which rose 3.6 per cent from the same period in 2017. The average balance of debt for those without a mortgage was at $7,460, which was up five per cent from a year ago.

“Consumers kept increasing their other debt burden, and therefore, [increasing] their vulnerability to a shock in the longer run,” the report said.

Source: Cbc

Demolition: Traders demand N5m compensation from Dunamis Church

The last has not been heard of the demolition of shops by the Dunamis Church security. The shop owners are now demanding N5 million from the church for their demolished properties.

Some of the traders, said that the total cost of their property is over N5 million and the church should compensate them before they would vacate the place. Chinedu Opara claimed he was one of the 49 traders that lost properties in the demolition. While he lost over N150,000, other 48 traders lost more than that:

“It was last two weeks, Sunday, March 23, 2019, that one security man who works under Dunamis had some misunderstanding with one woman called Mama Emma. In that process he threw the woman’s wares away and the woman held him by the throat. When they were separated, he threatened that they were going to burn down all the shops in the area.

“The same Sunday evening, another of the security came to me and revealed to me that they were planning to burn down our shops. I thought it was a joke. On Monday morning we discovered that all our things had been burnt.

“Later, when the senior pastor saw some people crying he promised to settle us adding that he had set up an investigation panel to investigate the matter. One day we were sitting down here, some policemen came and said that we should come and make some statements. By then, they had handed those people (culprits) over to the police. 

“When we went to the police station, among the whole people that were on duty that day, it was only one security man that they arrested. I made some statements and they said that we should come back and that the River Park DPO would like to see us.

“When we went there, I was detained. I was the victim. They said that they have been warning me to remove my container here and I refused. I was there till evening before I was released and warned to remove my container. One of the Hausa men doing ‘mai shai’ had been settled. Some women here are now stranded. I am just managing to come here.

“Four of my fridges and my goods were burnt.  I lost over N150,000 But the total loss was almost N5 million  and we were about 49 people that were affected.”

Reminded that the church supported some members to start businesses in the area, Opara said he did not benefit from any money and that no one that he knows in the area is a beneficiary of the fund:

“I have been here since three years even before Dunamis came here.  I am not aware that they gave somebody money to set up business.Yes the chairman and some people here are members but they have not given anybody any money to start business here.”

Another victim, Mrs Faith Michael, said: “On Tuesday morning, one of the traders who arrived around 5am called me on phone and said all our goods had been burnt. Before then, there was one security man that told me that they would burn our shops and that everybody should move everything.

“Behold when we came here on Tuesday they had burnt everything, both my provision and my drink. I borrowed money to start afresh. I lost over N70,000.” About refund, which the church promised:  “They have not refunded any money. They are not even saying anything. They said we should write our names. Since we wrote it, almost three weeks now we did not hear anything.”

The spokesman for the church, Pastor Victor Stephen reacted in a statement: “Our attention has been drawn to a video clip circulating the cyber space concerning traders’ property being burnt down by Dunamis Church at the new headquarters.

“We wish to state, though with dismay, that the Church, Dunamis, was not responsible for that kind of act and can never be. Dunamis is geared towards the restoration of human lives and destinies and can never be associated with such heinous acts to indigent persons.

“It is also worthy of note that some traders selling outside the church premises were empowered by the church as part of our Corporate Social Responsibility (CSR) to set up their own businesses. It would therefore be mischievous for anyone to assume that Dunamis would authorise such an act.

“Please disregard this malicious propaganda, Dunamis is not responsible. Thank you and God bless you.

Source: Sunnews

BREAKING: Nigeria May Slide to Another Recession – CBN

The Governor of Central Bank of Nigeria, CBN, Godwin Emefiele, has expressed fears that Nigeria may slide into another recession if measures are not taken to tackle the high rate of unemployment and other economic crisis. Emefiele said this today at the University of Benin, while delivering a lecture titled “Beyond the Global Financial Crisis: Monetary Policy Under Global Uncertainty”.

According to him, Monetary and Fiscal Policy Authority must rise up to the challenge to begin to think of what can be done to tackle the situation.

The CBN governor said: “From some of my concluding remarks, you may have observed whether you like it or not, there is global uncertainty that will unfortunately most certainly, lead to another crisis.

“The question could be, how are we, as Nigerians, particularly our leaders, I am talking of Monetary and Fiscal Policy Authority, how are we preparing our country for the next set of crisis?” He said “we have luckily exited recession.

We have seen inflation pending downward to about 18.72 percent in 2017 to about 11. 37 percent today. We see reserve moving up, exchange rate stabilizing but unfortunately, we still have issue and those issues bother on unemployment rate.”

He assured that CBN will continue to take proactive approach in mitigating the likely adverse effects that may emanate from external headwinds.

Source: Dailytrustng

Site Engineer, Five Others Trapped under a Collapsed four-storey Building in Onitsha

Six persons were feared trapped on Wednesday under the rubble of a four-storey building that collapsed in Onitsha, Anambra State.

The incident happened on No. 7, Ezenwa Street, Onitsha. An eyewitness said eight persons were under the building when the four-storey building under construction caved in at about 1.45pm.

The source said those trapped were six labourers, including the site engineer. It was gathered that the building was owned by a lawyer.

The Divisional Police Officer for Onitsha Central Police Station, Ifeanyi Iburu, led a team of security operatives to the scene.

Other rescue teams were Red Cross officers and other security agencies.

Sympathizers and passersby also joined in the rescue mission.

Confirming the incident, the Chairman, Red Cross Society in Anambra State, Prof. Peter Katchy, said the rescued casualties had been rushed to the hospital for medical attention.

He said, “One of the persons rescued by Red Cross is in the intensive care unit at Holy Rosary Hospital Waterside, Onitsha; while another is at the General Hospital, Onitsha.

“Four are still trapped under the debris of the collapsed building, including the site engineer.

“The Excavator and an Earth Moving Vehicle have just arrived now.”

Source: Punchng

CBA Takes Stock of Government’s Affordable Housing Program

Commercial Bank of Africa (CBA) held its fifth Economic Forum to take stock of the Affordable Housing pillar amid persistent structural challenges in the housing sector. The Forum was graced by the Principal Secretary, State Department of Housing and Urban Development Charles Hinga who was also the keynote speaker.

Also in attendance was a panel of experts from the public and private sector, who provided deep insights and understanding on various housing sector issues.

The forum touched on development within the industry such as tenant purchase scheme (TPS), joint ventures, property purchase overseas, offshore funding for development, the housing bubble, and the taxation within the industry.

“Every Kenyan has a right to decent and adequate housing with access to minimum basic services. I think the conversation that people have run away from is how we were expected to fund those rights and freedoms.

There has got to be some collective responsibility as to how we are going to fund these rights and freedoms that we have given ourselves. And so, in that process we agonized about funding model because not only was the State Department given a very ambitious program to implement, we were also not given money,” said PS Charles Hinga.

Speaking at the event, CBA Kenya Chief Executive Officer Jeremy Ngunze said the bank is keen on sparking conversation and economic thoughts on important development agendas and financial matters in the country.

“We are indeed excited to gather here today to take stock of the journey so far for the affordable housing pillar. Housing is one of the largest household expenditures and a major financial burden for many low-income households. Its affordability, therefore, remains central to the welfare of many families and our society at large,” said Mr. Ngunze.

The National Government’s Affordable Housing Program (AHP) differs from other housing schemes in Kenya as it is the first comprehensive program in which the government of Kenya seeks to use private sector funding to facilitate the provision of homes to Kenyans in the lower and middle-income brackets.

In the National Treasury Kshs2.8 trillion 2019/2020, Budget Estimates presented to Parliament last month, in the Budget Policy Statement, Kshs10.5 billion is to be allocated towards the Affordable Housing Initiative.

This is a 61.5% increase from the Kshs6.5 billion allocated in the 2018/2019 financial year budget, which shows the national government’s commitment towards delivering affordable housing.

Mr. Ngunze added, “As CBA, we look forward to partnering with the government and the private sector on this journey. We are particularly excited about the opportunity to collaborate with the Kenya Mortgage Refinancing Company in bringing down the cost of mortgages.”

CBA Forum was launched in January 2018 and is held thrice a year with a specific topic each time moderated by a CBA staff. The forum held earlier this year focused on Achieving Growth amid fiscal imbalances: the real effects of Kenya’s debt trajectory. Other previous forums focused on Kenya’s tax structure agriculture and the manufacturing industry.

Today’s panelist included Mr. Andrew Saisi (Managing Director, National Housing Corporation), Mr. Gikonyo Gitonga (Board Director, Kenya Property Developers Association and Managing Director, Axis Real Estate Ltd), Ms. Mugure Njendu (President, Architectural Association of Kenya), Mr. Kwame Owino (CEO, Institute of Economic Affairs), Mr. Johnstone Ol’teita (Interim CEO, Kenya Mortgage Refinancing Company), and Mr. Oscar Sambo (Corporate Relationship Manager, CBA).

Source: Sokodirectory

AfDB Approves EUR 90 million to support Kenya’s Mortgage Refinance Company

The Board of the African Development Bank has approved a EUR 90 million loan to support the establishment of the Kenya Mortgage Refinance Company (KMRC) to aid access to affordable mortgage loans by lower and middle income households.

The AfDB, which announced this in a statement, said the KMRC is a non-Bank financial institution designed to provide long-term funding and capital market access to local lenders, including commercial banks, and Savings and Credit Cooperative Organizations to help consolidate the East African nation’s growing domestic mortgage finance market.

The Kenyan government, through the central bank, is setting up the KMRC as part of initiatives to overhaul and stimulate the demand and supply balance in the housing and mortgage finance market, according to the statement.

It said the Bank’s intervention is in line with its flagship High 5s agenda; specifically the objective of Improving the Quality of Life for the People of Africa. The loan will result in multiplier effects on industries related to the housing sector and creation of jobs in these value chains.

The investment will complement Kenya’s ‘Big 4’ affordable housing national goal, and its plans to develop a self-sustaining affordable mortgage market. It will also promote inclusive finance through KMRC, whilst also assisting in creating new employment opportunities.

Through the Loan, the Bank adds on its initiatives to support affordable housing and development of mortgage finance institutions on the continent. As one of its priority objectives, the Bank supports investments that contribute to the widening and deepening of financial systems in Africa and enabling the private sector to mobilise and access long term domestic currency funding locally.

Source: Thisdaylive

FCDA Explains Why They’ll Not Allocate Lands Without Infrastructure

The Federal Capital Territory Administration (FCTA) has explained why it has insisted that land allocations will not be carried out until engineering designs and infrastructure are provided.

Speaking on some decisions taken by the administration recently, the executive secretary, Federal Capital Development Authority (FCDA), Engr. Umar  Gambo Jibrin, explained that the new order on land allocation in FCT was meant to avoid litigations over land issues.

Jibrin added that the administration’s recent policy changes in land allocation was in the effort to avoiding thousands of land litigation cases imminent after allocations, due to lack of proper engineering designs.

Also speaking, the secretary for Legal Services Secretariat, Muhammad Umar, disclosed that the administration has put in place a land review committee under the leadership of permanent secretary, Mr. Chinyeaka Christian Ohaa.

Umar stated that investors in the FCT need to know about the rules ahead of investment to avail them with the opportunity to be abreast with new unified law He continued, “I can tell you that 50 percent of litigations we lost during legal battles with the allottees were because of unknown land law.

Sometimes lands are double awarded because of non existing policies.” Umar revealed some problems militating against the progress of land allocation in the FCT to include, issues of mass housing allocation and the improper parks, among others.

Source: Leadership

Nigeria to Issue Second 30-year Naira Bond Today

The Debt Management Office (DMO) will today offer to investors the 30-year Naira dominated Bond on behalf of the federal government of Nigeria for the second time.

The note debuted last month and it was oversubscribed by 400 percent, according to the debt office.

Business Post reports that N20 billion worth of the debt instrument was issued in April 24, 2019 at a coupon rate of 14.80 percent and according to a circular issued last week by the DMO on today’s exercise, N30 billion worth of the 30-year paper would be auctioned at the same 14.80 percent.

It was disclosed that a total of N100 billion bond is up for grabs in three maturities; 5-year, 10-year and 30-year, all re-opening, with the settlement date fixed for May 24, 2019.

The DMO said it would offer N35 billion of the 5-year note at 12.75 percent and another N35 billion of the 10-year bond at 14.55 percent.

The debt office said intending subscribers would be expected to pay N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.

They will have to approach the following financial institutions for subscription; Access Bank Plc, First Bank of Nigeria Ltd, Standard Chartered Bank Nigeria Ltd, Citibank Nigeria Ltd, First City Monument Bank Plc, United Bank for Africa Plc, Coronation Merchant Bank Ltd, FSDH Merchant Bank Ltd, Zenith Bank Plc, Ecobank Nigeria Ltd, Guaranty Trust Bank Plc, FBNQuest Merchant Bank Ltd and Stanbic IBTC Bank Plc.

The bonds qualify as securities in which trustees can invest under the Trustee Investment Act. They also qualify as government securities within the meaning of Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for Tax Exemption for Pension Funds amongst other investors.

They are liquid assets for liquidity ratio calculation for banks and are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria.

In addition, the bonds would be listed on the Nigerian Stock Exchange and FMDQ OTC Securities Exchange.

Source: Businesspostng

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