Stakeholders seek new housing financing strategies
Stakeholders in the real estate sector have identified lack of access to construction finance by private developers as a major factor militating against the realisation of affordable housing delivery in the country.
They also said the proposed national housing bond is critical to provide cheaper financing and expand existing portfolio of assets as well as create jobs in the sector.
The experts, who spoke at the Housing Investment Forum in Abuja, noted that the proposed bond by the federal government will accord the sector the prominence it deserves in addressing mass houses issues.
Setting the tone, Minister of Works and Housing, Mr. Babatunde Fashola, said improving housing financing will bring about quality, reliable and sustainable real estate.
Fashola also stated that the problem facing the industry has not been solved in any part of the world, and urged developers, mortgage institutions and other key players to set achievable targets for government.
Also, the Minister of Finance and National Planning, Mrs. Zainab Ahmed, said that the country is challenged by inadequate housing supply to meet its teeming population growth, particularly for low-income earners.
Represented by Managing Director, Family Homes Funds Limited, Mr. Femi Adewole, she said: “PricewaterhouseCopper study indicated that 75 per cent (31.627 million) of the 42 million housing units in Nigeria are substandard.”
The minister stated, this low quality housing does not meet the conditions of habitability, safety and security, comfort, sanitation, accessibility, infrastructure, social amenities and socio-cultural adequacy by the United Nations and WHO.
According to her, all existing housing initiatives should be harmonised, the cost of construction of houses is high, making it difficult to provide homes for low-income groups, adding that the bond will develop the housing finance system and capital market.
Ahmed explained that they have set up the social intervention programme with N500 billion capitalisation to improve the quality of life for vulnerable groups, which is being run by the Family Homes Funds.
On his part, Mr. Temidayo Obisan of Securities and Exchange Commission, stated that to mitigate funding gap, primary mortgage institutions must embrace the capital market as a viable channel for long-term funds at low rates.
Obisan explained, “We are currently reviewing applications for registration of a N100 billion collective investment scheme that will be used to fund the housing sector, having engaged two fund managers that assured us that the proceeds will go to the sector.”
Also, the Managing Director, Federal Mortgage Bank of Nigeria, Ahmed Dangiwa said that the most critical of the challenges in housing delivery is finance, saying, this demands reappraisal to create a sustainable funding sources.
“We were faced with a number of challenges, during the issuance of a N100 billion mortgage backed bond for acquisition of government houses allocated to the civil servants as a result of the monetisation policy in 2007, which we surmounted,” he said.