By Mashe Umaru Gwamna
An Estate Surveyor and Valuer ESV.Arinze Unachukwu , said Liberalization mortgage financial system will improve housing ownership in Nigeria
ESV Unachukwu made the disclosure yesterday in Abuja .
He said the desire for home ownership is one that fills the mind of every human being regardless the race, creed and cultural affiliations.
He said “Housing development is by nature capital intensive, the huge funding requirement for housing makes the desire for it ineffective, that is to say, unachievable due to the low level of purchasing power faced by households mostly in less developing countries (LDCs)”.
According to him “In developing countries, issues of economic hardship which impacts significantly on household income have resulted to problems of housing unaffordability, homelessness and the formation of slums settlement.
“ In Africa, housing shortage is estimated to be at about 50.6 million units, several African countries are confronted with housing deficit and include but not limited to countries such as Ghana and Kenya having a backlog of 2 million housing each, South Africa having a deficit of about 2.3 million, Tanzania and Egypt having as high as 3 million and 3.5 million respectively.
“Not forgetting Nigeria whose deficit in housing would require the supply of about 700,000 housing units annually for a timeframe of about 20 years with a financial budget estimated to be over 12 trillion Naira”.
He explained that “It is important to note that the inefficiency of mortgage system in these developing nations have compounded housing problems. In advanced economies like the United States of America, Britain and Denmark, a well-structured mortgage scheme have been adopted for owing houses.
“The strategies employed in addressing housing challenges is country specific giving rise to the variations observed in terms policies and outcomes, for example the United Kingdom through its peculiar housing policy, have successfully increased the supply of new affordable homes in London to about 30% from the initial 13%, based on effective mortgage system”, He said
He explained that “The fate of housing supply in Nigeria is one that have been bedeviled by not just the tight economy but the poor implementation of housing policies.
“Over the years, housing in Nigeria have been financed through a number of institutional sources such as: Budgetary appropriation, Commercial/merchant banks, Insurance companies, State Housing Corporations and the Federal Mortgage Bank of Nigeria (FMBN), yet the issue of inaccessibility to fund have become daunting to applicant of credit facilities.”
The Estate Surveyor noted that, the major challenge in obtaining mortgage by households have been the high interest rate, short repayment period and bureaucracy.
Other challenge include the delay in obtaining registered land titles to serve as security for loan. Members of the public from low-income class struggle to own houses even when mass social housing schemes are implemented by the government, this is mainly due to the fact that the government in most cases make ineffective targeting when providing subsidies.
“The development and supply of unaffordable housing have marginalized the indigent groups in the society and have created inequality due to the situation of high-income earners taking up the available housing loans.
“The irregularities of public housing policies should be addressed by liberalizing the mortgage financing systems.”
He further, reiterated the high interest rate charged by mortgage banks should be reduced along with deliberate effort to increase the period of loan repayment.
“Pool of idle funds lying unutilized in financial institutions like pension should be invested in real estate development especially residential property investment in order to curb issues of homelessness.
The need for sustained synergy between public and private sectors through the initiative of sound public private partnership should be encourage to boast housing supply at increased rate with affordable cost.”
He also mentioned that, the expertise of professionals in housing feasibility and viability studies such as the Estate surveyors and Valuers should be employed in the design and construction of housing to mitigating housing finance risks such as market risk, liquidity risk and managerial risk. Thanks
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