Over the years, Nigerian artisans have demonstrated high level of professional incompetence over the years compared to their counterparts from some West African and Asian countries, including Ghana, Benin Republic ,Togo, China and India.
Lack of capacity in terms of quality of jobs they churn out has become the weak point that has not only put their jobs on the line but led led to foreign artisans virtually taking over jobs, hitherto, done by Nigerians.
This has in turn worsened the unemployment situation in the country.
According to the National Bureau of Statistics (NBS), the country’s unemployment rate worsened in the third quarter of 2018, rising from 18.8 per cent in Q3 2017 to 23.1 per cent in the third quarter of 2018.
It has also been estimated that far more than N10 billion is being lost annually to immigrant artisans, who have displaced Nigerians in construction sector.
To halt this trend, the Nigerian government has taken it upon itself to boost the capacity of local artisans in order to make them relevant and competitive for jobs in the construction industry.
Blazing the trail is the Lagos State Government in collaboration with stakeholders in the industry to build the capacity of artisans for the construction sector under the Master Craftsman Project.
Having graduated 170 artisans in the first batch, the state government has rolled out another set of 350 trained personnel.
The Master Craftsman Project is aimed at addressing skill gap in housing sector in Lagos State.
Explaining the rationale behind the project, the Commissioner for Housing, Prince Gbolahan Lawal, said the scheme was aimed at scaling up professionalism of artisans in the state in order to meet up with current global trends.
Lawal said that the platform created an opportunity for artisans and workers in the construction industry to receive certificates after being trained to acquire 21st Century skills.
According to him, issues of quackery, quality of service, inappropriate charges, and unethical conduct leading to building collapse were considered and built into the curriculum to produce world class artisans.
Permanent Secretary in the Deputy Governor’s office, Mrs Yetunde Odejayi, who represented Dr. Oluranti Adebule, said that government had the vision of training 4,000 artisans. She disclosed that the state government was involved in PPP on affordable housing development, where 20,000 units are ongoing already. Through the project, she said that 60,000 bricklayers, 40,000 masons, 20,000 carpenters, 20,000 plumbers, 60,000 tilers, 40,000 painters would be required. Artisans to be engaged in the project, she assured, would come from the trained craftmen and women. According to the deputy governor, the Master Craftsman Project is an initiative of the state government to bridge the skills gap, in order to prevent foreigners from taking over jobs of technicians in the built industry.
Adebule stated that government was “determined to reverse the trend’’ of influx of foreign artisans, to ensure local artisans take back their pride of place in the built industry.
Speaking with New Telegraph, one of the trainees, Mrs Folasayo Anjorin, a welder, said her skills on welding had been sharpened through the training programme.
Another trainee, Olubunmi Erinle, promised to make use of everything she learnt during the course of the training, appealing to government to give them jobs now that the training has ended.
Another participant, Mr. Orire james, a carpenter, said he had learnt more about the dictates of his job through the training.
He said: “They trained us very well and updated our knowledge about the latest innovations in the industry for about three to four weeks. We really gained a lot and this will really impact positively on our jobs.”
One of the tutors and retired lecturer at Yaba College of Education, Suraj Kolawole, said the artisans were taught many things that have to do with their jobs.
“We taught them most of the things they lost in the course of the job such as estimation, procedures, dealing with clients, team work, reality of the job they want to do and the risks involved,” the tutor said.
At the end of the programme, Kolawole said the trainees were asked to execute a project with the training centre. He said: “ We believed that these people would be able to achieve delivery of quality buildings.” Through the training, he said the nation would be able to reduce the number of foreign artisans and also boost morale of workers, adding that it would also prevent failure in building.
At the federal level, Director General, C-STEmp Construction Skills Training and Empowerment Project Limited, Anthony Okwa, told New Telegraph that about 6,000 artisans had been trained directly, while more than 24,000 have been facilitated. He stated that the training programmes for the artisans in the construction industry have been going on very well especially with the recent support from the Presidency through the Npower Build Program involving the Council of Registered Builders of Nigeria (CORBON), which has encouraged more school leavers and girls to participate.
Okwa stated that the Npower job creation programme of the Buhari administration was being delivered in about 400 centers across the country under the auspices of Council of Registered Builders of Nigeria (CORBON) with his agency’s active support. He disclosed that the agency through the training was trying to change the attitude and disposition of beneficiaries, and current low regard for artisans. To this end, he said the agency had instituted artisans awards “which aims at according them due recognition and rewarding excellence.” On the prospects of artisans after the training, Okwa said: “In all spheres of human endeavor, Nigerians have been known to excel, and with the training gaining international attention, we are beginning to receive enquiries for supply of Artisans to employers from outside the country.”
President, Nigerian Institute of Building, Kenneth Nduka, said since technology has ever been dynamic, it would amount begging the question “if one accepts the current quality of artisans as being satisfactory.”
He warned that the present situation where foreign artisans dominated Nigeria’s construction sector spelt doom for the economy.
According to him, the implications meant loss of jobs for Nigeria’s nationals and loss of revenue through capital flights. Besides, he said other implications included security challenges, near absence of indigenous capacity to deliver on projects, and dependence on foreign dictates for the implementation of infrastructural development initiatives.
On what must be done to change the narrative, the NIOB president stated that it would require responsive investments on all diverse human capacity and skills development initiatives.
Aside, he said it would involve the creation of motivating opportunities and convenient inclusive environment that will serve the desired stimulus for constructive engagements and deployment.
Nduka stated that funds in terms of transferred earnings that should have otherwise been invested in Nigeria, as well as the multiplier economic opportunities that would attract values to the GDP of the country, were being lost as capital flight to foreign countries.
He disclosed that NIOB had collaborated with Nigerian Board of Technical Education (NBTE) and CORBON to establish the National Occupation Standards for relevant skills for the building industry.
He said: “NIOB having been granted an awarding body status by the Federal Ministry of Education,through the NBTE, is currently on a country wide quality assessment exercise to evaluate all the N-Power build artisans.
“Registration of training centers for Building construction skills are on going. Above all the institute is mobilizing and encouragng her members nationwide to key into the training for Quality Assurance Assessors currency being driven the National Board for Technical Education so that the objectives for quality skills standardisation in the building construction Industry could rightly realised.” Quality craftsmen in any nation, Nduka said, guaranteed safe built environment, populated with cost effective, quality radiating, image enhancing, productivity promoting, elements protecting, secure, aesthetic and needs satisfying building infrastructures.
“Above all, the political, economic and social potentials of the country would enjoy a positive boost since the skill we have could massage our infrastructure development strides and accordingly excited diverse opportunities for developments and growth maximisation,” he said.
Commissioner for Physical Planning and Urban Development, Rotimi Ogunleye, urged the grandaunts to uphold construction ethics to stem incidence of building collapse.
Through training and retraining programmes, Nigerian artisans in the construction sector stand the chance of competing very well, if not better, with their counterparts all over the world.
This is not the best of times in the nation’s real estate sector, as it has continues to slide negative despite insinuations that the country has exited recession. For instance, in 2018, the sector witnessed downturns largely due to several factors ranging from government macro economic policy to over-supply in commercial and retail sectors as well as inappropriate supply in the residential sector.
This also impacted negatively to the sector’s contribution to the National Gross Domestic Product (GDP).The latest GDP figure shows a negative growth of -2.68per cent at the end of October 2018 and the Q3 contribution to GDP dropped from 7.09 per cent in Q2 to 6.88 per cent in Q3.
With the conclusion of the presidential election, which saw the incumbent emerged winners, experts in the sector urged the Buhari administration to come up with more robust policies, programmes that will revive the sector and reposition it as the second largest employer of labour behind agriculture.To these experts, housing is a sector, which seriously deserved appropriate intervention from government.
According to them, international standards have set the maximum amount that can be dedicated from a workers’ salary, which should not exceed 30 per cent of the gross pay. Regrettably, rents for descent accommodation in most urban areas in Nigeria exceed this benchmark. The immediate past president, Nigeria Institute of Architect, Tonye Braide said housing is a starting point in ameliorating the high living standards in urban centres.He stressed that when rents are excessively high, alternative sources of earnings are normally sought, which leads to corruption.
Braide however believed that Government would take pragmatic steps in its second term to make housing affordable and available. According to him, simple economics states that where the supply rises and demand remain fixed the price should fall.“There are critical factors responsible for the high cost of housing. The first is land cost. The cost of land in most Urban centres are artificial. Speculation and greed are factors, which drive the prices.
“The actual cost of procurement of government acquired land is relatively low and affordable but speculation and greed push prices to figures up to 500 per cent.“The result is that in building an affordable house, the actual construction costs are almost at par with the cost of land. This should not be. Land should be no more than about 15 to 20 per cent of the cost of the final development costs.
“People buy land at highly inflated rates because so many are pursuing so few plots with appropriate infrastructure”, he said. Braide therefore urged government to embark on a massive public works programme, which should include development of site, and services housing projects to give access to cheap land complete with infrastructure.
According to him, Executive Order 7 should extend to urban roads and site and service projects.He stressed that Government can raise 40 year money to be secured against Land Use Charges and Property Taxes in order to present low cost serviced plots.Apart from that, Braide is of the view that government can change the age-long payment of compensation, which is being subjected to corruption, and replace it with a debt-equity swap
Communities, he said, can receive Schools, Primary Health Care centres or percentage of housing development thereon in lieu of direct cash compensation.Inner City areas should be redeveloped and zoning laws modified to allow for medium to high rise which will reduce the Land Constant in the computation of the disposal prices of the housing, while government should flood the country with small scale building component manufacturing plants.
To create employment, the renowned architect said there should be one SME factory making one building component or the other within 100 kilometers of every local council headquarters. This, he said, will also bring down construction costs because over 25 per cent of construction costs go to the logistics of transportation of the materials, while a reasonable reduction of cases of double taxation on building materials can be achieved.He further urged government to provide credit guarantees for affordable housing projects and put the onus of performance on the developer.
According to Braide, the developer must seek appropriate professional input to develop houses that will be acceptable to the public at a price that can be afforded. Developer, he said, gets paid upon hand over of keys to a willing buyer, while the credit guarantee scheme will be revolving to ensure constant chain inflow from the amortization process in the various mortgage schemes.
Braide is of the view that it will create a multitude of activity in housing delivery in Nigeria, creating a millions of jobs and put the development process directly in the hands of the consumers. “There will be no mark-up of digits in disposal prices. Affordable Housing output will rise by over 300 per cent as Current Operating prices will build up to three houses per lot.
“The launch of a massive housing construction project will fast track a parallel skills acquisition programme for youths as learning will be accelerated trough hands-on learning directly on the construction sites.“With the injection of 500,000 units of affordable housing every year, the current level of the minimum wage will become more meaningful as even the lowest paid worker will have access to an entry level one bedroom house”, he added.
Also, the Chairman, Estate Surveying and Valuation Registration Board of Nigeria (ESVARBON), Sir Nweke Umezuruike, said the government should sincerely assess itself whether it has done well to continue the policies or if there is need to readjust in their policies for the next four years.
Describing housing as one of the very disturbing areas that should be tackled frontally, he said construction industry along side agriculture is two key areas all over the world that normally creates massive employment.
Unfortunately this aspect of these areas, Umezuruike said is not being tackled. He also regretted that over a decade, Nigeria has established itself, as a trading nation even though, there is no country all over the world that has made progress being a trading nation.He urged the government to change that attitude by leading Nigeria into more productive activities in the two areas of agriculture and construction industry.
According to him, taking a census of all our housing stocks is important in knowing our housing needs and how to tackle whatever deficit we have. “ As at today, it appears to me that there is no shortfall for supply of houses for the rich and so whatever short fall there is whether the 17 million or any other number we will come out with we know the housing stock we have the area we are lacking is for the masses.
“Government owes a duty to this country to engage in massive housing construction for the masses, those who cannot build for themselves. “We are often reminded how there are many vacant houses in Abuja, those houses are not there for the masses. They are made for the rich”, he said.
The ESVARBON chairman also want a change of policy in the area of provision of artisans because it is generally believed in Nigeria that the best artisans are those that comes from Benin Republic and Ghana.“ I want to see government to put together a positive policy that will train and empower Nigeria artisans. They should lead in the provision of housing.
“Private developers want to recover their investments within a very short possible time and the only way to do that is to build for the rich, those who can afford it. “The only way they can do it is to build and sell. Building and selling put Nigeria housing sector in cash and carry system, which cannot work all over the world.
“Government should enable the mortgage sector to work properly. “We heard that there are plenty of money about N8 trillion in the pension fund, what is that money doing there? All over the world, pension money is used for housing and we allow such money to un-utlised or for commercial ventures, which do not assist so much for the ordinary man”, he added.
For the 1st Vice President, Nigerian Institute of (NIOB) and Chief Executive Officer, Reo-Habilis Construction Limited, Mr. Kunle Awobodu, the economy has not been favourable to the real estate because most of our construction materials are imported and the value of Naira has made it almost impossible to import quality materials for building and for affordable housing.
According to him, at the just concluded international builders forum in Las Vegas, there were several attractive building materials and new methodologies but by the time you convert the prices to Naira, you discovered that it will be overall building production will beyond affordability, so it is very worrisome for most Nigerians at such fora. He urged the incoming government to seriously work on the economy and come out with favourable policies.
London Property Market Hit
London is the destination of most foreign funds in the U.K. Last week a report from estate agency Knight Frank said London was the world’s top ‘wealth center’ due to its global popularity.
However, not all of that money is from legitimate origins, and law enforcement agencies have started to crack down on properties bought with illicit wealth.
Last year, law enforcers used a new power—the Unexplained Wealth Order—to investigate how Zamira Hajiyeva, wife of an Azerbaijani banker, managed to acquire an £11.5 million house in Knightsbridge. Their salary was far from sufficient for such a purchase, they argued.
The Unexplained Wealth Order gives authorities the power to seize assets over £50,000 owned by a person “who is reasonably suspected of involvement in, or of being connected to a person involved in, serious crime.”
In another move against money launderers, the Home Office said last week it would make getting a visa tougher for wealthy investors. The Tier 1 Investor Visa is a favorite of wealthy persons wanting British residency. These changes “will better protect the U.K. from illegally obtained funds,” the Home Office said.
However, these moves weighing in on an already tough property market. Knight Frank’s Prime International Residential Index (PIRI), which tracks luxury residential markets, found London’s had declined by 4.4 percent last year. On the ranking, which was released last week, London stood just nine places ahead of Lagos, Nigeria.
Real estate prices have similarly suffered. Coutts, a private bank that tracks properties in London worth over £10 million, said the number of properties sold in this category had fallen 12.1 percent in the 12 months to December 2018.
While a host of economic forces—including Brexit—are to blame, many believe the government’s hostility toward suspicious funds has taken its toll.
“We all know that, at the moment, the prime central London market has collapsed,” Mark Hayward, chief executive of NAEA Propertymark told the Treasury Committee last week. “So for those on the ground, perhaps in a small, niche company for whom the fees will be significant, will they ask too many questions, which could put people off purchasing.”
Source: Oliver Williams
Access to adequate housing for low-income earners is a critical development issue globally. A safe and stable home is the first step to a productive, healthy life. Yet owning a home is beyond the reach of the vast majority.
In sub-Saharan Africa, the poor have very limited access to long-term financing for housing, which is almost invariably limited to commercial banks offering formal, multiyear mortgages.
Only 2.4 percent of the Kenyan population, for example, is able to afford typical loan rates. At the end of December 2018, there were only 26,187 active conventional mortgages in the whole country — the majority of which were granted to urban professionals.
In Uganda, which has a population of 42.8 million, the number was just 5,000 in 2018.
“We are continuously exploring and innovating our approach to address additional dimensions of the housing crisis and encourage others to do the same.
Housing microfinance allows low-income families to improve their housing incrementally, as they can afford it. Through access to housing microfinance, households in sub-Saharan Africa can improve their housing and their quality of life.
That is the key finding of evaluations of a recently concluded six-year project in Kenya and Uganda.
Microfinance at work
Building Assets, Unlocking Access
The partnership between Habitat for Humanity and the Mastercard Foundation is aimed at making an impact on housing in Africa by enabling existing financial service providers to design housing microfinance products and housing support services that can be accessed by low-income families to use in the incremental improvement of their homes.
The objective of the project was to develop scalable and innovative housing microfinance to be replicated by other financial service providers in sub-Saharan Africa.
The project has enabled over 70,000 households to access housing microfinance products improving their shelter, living conditions, and social well-being.
The Building Assets, Unlocking Access project helped financial service providers to develop housing microfinance products for people living on $5-10 per day.
The participating institutions offered loans of $30-10,000 for improvements such as adding an extension, toilet or running water; finishing a roof; adding insulation; as well as for constructing a new home.
These products were designed for the vast majority of the population who live in substandard accommodation and are locked out of formal housing finance.
These households may possess a firm desire to improve their living circumstances and prospects, but can only afford to do so incrementally.
Nearly 30 percent expanded their homes, and around 9 percent built separate kitchens, As a result, overall housing satisfaction rose by almost 15 percentage points over just a one-year period.
In Uganda, the study found that the existing quality level of housing was already comparably higher than in Kenya. However, a 20 percentage point increase of clients used their loans to build separate kitchens. Overall housing satisfaction rose by 30 percentage points.
In addition, the improvements made by Uganda borrowers were not confined to their own homes, but frequently applied toward development or improvement of rental units.
These rental units contributed to increased income for borrowers — an unanticipated dynamic in our study and a fact that addresses the key concern many have that housing microfinance diverts funds and resources away from income-generating activities.
Improved homes mean better health outcomes too. In children younger than 6 in Kenya, significant decreases were found in vomiting, sore throats, and rashes, all illnesses associated with allergies and poor environment.
In Uganda, however, these health improvements were not observed, with evaluators noting that it can take time for health indicators to become evident.
Janet Maritim, a farmer in Bomet, western Kenya, said: “It has been a huge relief not to worry about the health of our children. In the old house, the cold air that ran through the rooms always made me fear that a flu would turn into a serious illness like pneumonia. It makes me happy to see the children thrive.”
Jane Migare-Miluka waited seven years for new housing to be completed. When it finally was, her name was not on the list of residents.
This is part of our six-piece Failed Aid series, which investigates citizen reports on failed or unfinished aid projects in Africa.
Improved housing can have a positive effect on children’s education, offering more space in which to study and making them less likely to miss school due to sickness.
Though it was too early for such factors to show up meaningfully in the survey, many respondents expressed delight with the impact their home improvements were having on their children.
The business case for housing microfinance
Not only does housing microfinance align with the social mission of many microfinance institutions, it also makes financial sense, with 47 percent of institutions saying such loans have relatively the same profitability as more conventional microfinance loans, such as those for business or farming.
At Habitat for Humanity, we believe housing microfinance can reach far greater numbers of people.
The sustainability of these products will carry the impact of improved housing forward and the market is demanding more progress in this sector, as indicated by the recent announcement of $26 billion in investment pledges for housing in Kenya.
Two of the key partnering banks — KWFT and Centenary Bank — are posed to disburse an additional 50,000 housing microfinance loans or so over the next 12 months.
There are obstacles, of course. Other financial institutions will need long-term funding and guidance as they learn how to develop, market, and manage housing microfinance products for their markets.
To expand the product, institutions will need to identify adequate sources of long-term funding. Each market is different, and attention will need to be paid to designing loan products that suit local characteristics.
Also, awareness of the housing microfinance concept is still low. With skeptical looks, people ask me what this small-loan, incremental approach looks like in practice.
The findings of these evaluations are a great step forward in addressing the skepticism and understanding the real impacts.
We are committed to sharing the opportunity that these products present for improvements in low-income housing. I am convinced this can become a major sector in the continent and do a great deal to relieve frequently poor housing conditions.
When I discuss what we have done in Uganda and Kenya at conferences and forums, I realize that this is but one part of a larger housing market dilemma.
We are continuously exploring and innovating our approach to address additional dimensions of the housing crisis and encourage others to do the same.
Source: Kelvin Chetty
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.
House prices rose in 24 out of the 45 world’s housing markets which have so far been published, prices fell in 21 of the countries.
A report by Globalpropertyguide said the more upbeat nominal figures, more familiar to the public, showed house price rose in 35 countries, and declined in 10 countries.
It added that, however, 29 of the surveyed housing markets showed weaker momentum in 2018 compared to the previous year, suggesting that global house price growth is now decelerating.
“Most of Europe and parts of Asia continue to experience strong price rises. There have also been notable increases in Singapore, Russia and Qatar. But Hong Kong, China, Sweden, Montenegro, Turkey and most of the Middle East have experienced either house price falls – or a sharp deceleration of house price rises,” it said.
“The strongest housing markets in our global house price survey during 2018 included Malta (+10.48 per cent), Makati CBD, Philippines (+9.91 per cent), Netherlands (+8.49 per cent), Singapore (+7.32 per cent), and Chile (+6.94 per cent), using inflation-adjusted figures.
The biggest year-on-year house-price declines were in Egypt (-19.24 per cent), Turkey (-8.82 per cent), Dubai, UAE (-8.22 per cent), Kiev, Ukraine (-6.09 per cent), and Beijing, China (-3.73 per cent), again using inflation-adjusted figures,” the report said.
It stated that momentum was much weaker as only 16 of the world’s housing markets for which figures were available showed stronger upward momentum during 2018, while 29 housing markets showed weaker momentum.
Momentum, according to the report, is a measure of the “change in the change”; simply put, momentum has increased if a property market has risen faster this year than last (or fallen less). Momentum has weakened in almost two-thirds of the housing markets covered in our survey.
The report said, “Inflation-adjusted figures are used throughout this survey. In the case of Kiev, Ukraine, the Global Property Guide adjusts using the official US inflation rate since Ukrainian secondary market dwelling sales are denominated in US dollars.
“Malta is now the strongest housing market in our global survey, with residential property prices rising by 10.48 per cent during 2018, after year-on-year rises of 7.39 per cent in 2017, 12.71 per cent in 2016, 8.67 per cent in 2015, 4.33 per cent in 2014, and 5.34 per cent in 2013, using inflation-adjusted figures.
During the latest quarter, property prices rose by 5.7 per cent quarter-on-quarter. Malta’s economy is projected to grow by 5.2 per cent this year – the fastest pace in the EU and about three times as much as the union’s average growth.”
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.
A lot of research and discussion, have gone into the topic of gender diversity and the role of women in senior positions in companies.
More often than not, most of the results pegged that companies with a higher percentage of women in leadership positions, tend to perform better than those with low women representation at senior positions, on a wide range of performance metrics.
The real estate industry, which has largely been male dominated with very few women in leadership positions, is slowly acknowledging this fact and is seeing a positive change.
Not surprisingly though, as most of the large firms dealing with property are family-run businesses, the reins of the business were eventually passed on to the sons of the family.
The construction business, because of the nature of the industry, with long hours on site, having to deal with contractors and workers, again became traditionally male-dominated.
Consequently, the investment side also took a natural progression to being male-dominated.
Women’s participation in the real estate industry
Over the years, the Indian real estate sector has grown significantly. With the sector getting more organised, there has been increased international penetration into the Indian markets and increased service offerings.
In this scenario, limiting the sector to only one segment of the population, also limits the available resources and talent base that is needed to take the sector forward.
The expansion of companies and the need for talent, prompted the inclusion of more women into the sector.
Currently, while we do find that women feature strongly at the entry-level and administrative positions in the industry, their numbers dwindle as we go up the ladder.
Those who make it to the leadership position, are clearly outliers – ambitious, talented and hungry for growth.
One of the most important factors, for the growing number of women in companies, is an inclusive workplace culture, where both, men and women, have the environment to succeed.
Firms that value diversity and embrace high ethical standards, thus, providing opportunities for women to take on broader roles, will attract more female talent and eventually, have a larger talent base to pick from.
Being a woman in the real estate industry: An advantage?
With the real estate industry growing by leaps and bounds, today, if I look around me in my current organisation (Colliers International India), the opposite may hold true.
There are more women than men, in the division responsible for selling homes. Being a woman in the real estate industry may, at times, be an advantage, as well.
With qualities of empathy and persistence present in the DNA of most women, client relationships are honed to a larger extent. Women tend to be more nurturing, more sensitive and more patient towards client’s needs.
Another aspect that women tend to bring into the business, is a more balanced and dispassionate outlook.
Women, typically, are good at balancing work and family and hence, are better at multitasking, which is a critical aspect in real estate, owing to the nature of the business.
Women, in various segments of the sector, are able to bring in a unique combination of compassion, assertiveness, focus and determination.
Qualified and educated women are able to balance out and provide the necessary synergies required to take the business forward.
The road ahead
Some women do opt-out prematurely, which could also be one of the reasons for their miniscule number at senior positions, not only in real estate, but in other businesses, as well.
Nevertheless, visibility of women in leadership roles, examples of which are mushrooming now, have nurtured the art of balancing work and family and in turn, are helping and motivating the younger, ambitious ones.
With the sector moving towards maturity, we need to see more women taking on leadership roles in all segments of real estate development, as well as consultancy.
On this International Women’s Day, let’s celebrate the spirit of womanhood.
Here are four more questions to ask yourself before you take the leap. Look them over to get a sense of whether or not refinancing is the right move for you.
What are the benefits of refinancing?
Most people would agree that it only makes sense to refinance your mortgage if there is some tangible benefit to doing so.
Before you start the refinancing process, it’s important to root out what your specific benefits will be, as well as how great the ultimate payoff to refinancing will be.
In general, there are three major benefits that people see from refinancing:
A lower monthly payment: Though interest rates are higher now than they’ve been in the recent past, they’re still relatively low from a historical perspective.
If you took out your mortgage prior to the financial crisis of 2008, you’ll likely still be able to refinance at a much lower interest rate, which will lower your monthly payment.
A different loan term: Even if a lower interest rate is not an option, you can also lower your payment by spreading your current loan balance -which is presumably less than the original – over a longer term.
Alternatively, you have the option to shorten your loan term and pay it off faster. Though this will likely raise your monthly payment, if you have more income than you did when you first applied for the loan, it could be a shrewd move for your financial future.
Cashing out your home equity: With a cash-out refinance, you refinance your home for more money than you currently owe on the property. The excess is given to you in the form of funds to be used however you wish.
The best way to find out how much of a benefit you could get from refinancing is to talk to a lender. He or she can look at the details of your financial situation, as well as the current mortgage landscape, in order to help you determine whether or not refinancing is right for you.
Where is my break-even point?
In addition to focusing on what the benefits to refinancing will be, you also need to take a long, hard look at how long it will take you to see them come to fruition.
The reality is, refinancing isn’t free. Just like when you first took out your mortgage, you have to pay closing costs in order to receive your new loan. These fees can often add up to thousands of dollars.
With that in mind, it’s important to look at how long it will take you to break even on your refinance, or how long it will take you to recover the cost of those fees and truly start to see savings from your new loan.
To calculate your break-even point, divide the total sum of your closing costs by the amount that you are saving each month from the refinance.
The resulting number will correspond to the minimum number of months that you need to stay in the home in order to see a tangible benefit from refinancing.
However, you’ll want to make sure that you plan to stay in your home for much longer than that in order to really start to see the benefit of that savings.
How much equity do I have in my home?
For a refresher, equity is the percentage of your home that you own outright or the percentage of your home that is not currently mortgaged.
As you pay down your loan, your equity grows. When you go to refinance, you’ll likely face specific equity requirements.
Typically, lenders will expect that you retain at least 15%-20% equity in the property. (Though, it is possible to find lower options.) Lenders prefer that you maintain equity in the home because it means that you retain a stake in the property and have an incentive to keep making payments on your loan.
Finding how much equity you have in the property is easy. All you need to do is take the current value of the property – which you can find by having an appraisal done or having a real estate agent conduct a comparative market analysis – and subtract the amount you owe in your mortgage.
Does my old mortgage have a prepayment penalty?
Though it may seem unfair, sometimes mortgages come with penalties for paying off your loan early (and essentially denying the mortgage company the income they would have made off of your continued interest payments).
The exact penalty will vary by company, but according to a refinancing guideby the Federal Reserve Board, it usually ends up being one to six months worth of interest payments.
Your first step should be to read over the terms and conditions of your current loan to see if you’re subject to these penalties. Then, if so, to factor those fees into your cost calculations for your break-even point.
That will give you a clearer idea of whether or not refinancing makes fiscal sense for you at the moment.