REAL ESTATE NEWS

Housing: A priority in 2017

Home ownership in Nigeria remains quite difficult. In recent times, purchasing power has been severely eroded which makes it difficult for income earners to purchase houses. The cost of property development in Nigeria is relatively high, with around 70% of building materials imported from other countries. Real estate industry estimates suggest that about 100,000 new houses are built each year in Nigeria, compared to the estimated demand of 700,000 units by the teeming population.

Mortgage financing, the alternative to direct purchase, is outrightly quite not budget friendly as the cost of borrowing in Nigeria is expensive due to the interest rates. According to the Centre for Affordable Housing Finance in Africa, Nigeria’s homeownership rate in 2016 was estimated at 25%. However, industry sources suggest that the ratio of mortgage loans to total GDP remains extremely low at 0.5%, compared with 80% in the UK and 31% in South Africa.

In addition, industry sources suggest that due to the country’s housing deficit, tenants spend about 60% of their income on rent compared with 30% recommended by the United Nations. Given the current squeeze on consumers’ pockets, this has become more difficult for Nigerian nationals and is putting immense strain on the country’s property market.

Family Home Fund (FHF) is geared towards boosting homeownership which has recently kicked off in eleven states in the country This fund falls under the government’s social investment programme and is worth US$100m. The World Bank and AFDB are core contributors. The fund will be deployed to drive mortgage finance via a model by which developers will build special houses to the FG’s stated specifications. The Fund will bridge the affordability gap by providing long tenor mortgages at single-digit rates to qualifying first time home buyers within targeted household income thresholds in the country.

DUPLEX FOR SALE IN LEKKI PHASE 1

The initial delivery target is up to 100,000 units, rising to 500,000 units per annum within the span of three years. Nigerians with monthly disposable incomes as low as N30, 000 will be able to benefit from the scheme. Already about nine states are supporting the scheme by giving land and certificate of occupancy. Other states are expected to follow suit as the fund gathers momentum across the country.

Another homeownership scheme, My Own Home, was introduced recently by the CBN(Central Bank of Nigeria). It is designed to promote mortgage and financing literacy in the country. The scheme is to have a span of 15 to 25 years, depending on factors like the age of the borrower and their income level. It is assumed that the interest rate will be single-digit, however, the exact figure is undisclosed. The CBN has appointed nine microfinance banks to implement this housing finance scheme.

On a state level, the housing deficit in Lagos State alone is estimated at three million units. The Lagos State government aims to develop 20,000 housing units over the period of three years. This initiative will be modelled as a rent-to-own scheme, which will afford first-time home buyers with a verifiable source of income the opportunity to own their homes. Successful candidates will be required to pay 5% of the total value of the property as a down payment while the balance is to be spread over a ten year repayment period. The scheme is an improvement on the previous administration’s Lagos homeownership mortgage scheme, which required an initial deposit of 30% of the total cost.

MINI FLAT FOR RENT IN OGBA

Recently, the middle class find it difficult to secure houses that are located in close proximity to city centres. The housing units obtainable for this social class are usually on the outskirts due to their earning capacity which by the way is relatively decent.

Source: The Guardian

664 Total Views 2 Views Today
(Visited 99 times, 1 visits today)
Tags

Related Articles

Close