To really develop the Nigeria’s housing sector, former president of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr Emeka Eleh, said there was an urgent need to deepen mortgage penetration in the country.
Low mortgage penetration, which is said to be less than one percent, he said was one of the constraints limiting access to affordable housing in Nigeria.
Because of its huge requirements and the high cost, it was said that mortgage has not only been inaccessible, but also unaffordable to many people who need it.
It was gathered that only about 10 percent of Nigerians who want to purchase a house has the capacity to do so compare with 72 per cent in the United States, 78 percent in United Kingdom, 60 percent in China and 92 percent in Singapore.
With the low-income level of Nigerians, Eleh noted that only few people would be able to afford mortgage.
“Even with the most liberal polices, how many people can afford a mortgage even at very low interest rate? Only very few,,” Eleh said.
According to him, the sector cannot develop without mortgages that will be affordable in terms of interest rate and tenure.
Eleh, who is also one of the Principal Partner at Ubosi Eleh and Co., said that unclaimed dividends, dormant account balances and intervention funds should be used to jumpstart affordable mortgages in the country.
In his presentation on:”Nigeria and the quest for affordable housing,” Eleh identified high cost of funds/lack of mortgages, high cost of building materials, land tenure/land transfer, huge infrastructure deficit across the country, dependence on foreign expertise and equipment, reliance on traditional construction methods, incidence of multiple taxation and high poverty rate of the populace as major constraints to affordable housing in the country.
To enhance home ownership among Nigerians, Eleh pointed out the urgent need to address the housing issues and key enablers such as finance/mortgages, infrastructural development, materials and labour, title and efficient transaction /transfer process.
“A solution to these will, apart from providing affordable housing, create employment; generate immediate multiplier effects in the economy, enhance capital accumulation, enhance socio political stability and citizen wellbeing.
Proferring solutions, the real estate expert said there was real need to address the issue of production of local building materials.
According to him, government should treat the Nigeria Building and Road Research Institute as a special body by making intervention fund available.
He also called for a robust land reform agenda that will give people title (Certificate of Occupancy) to their land, adding that government should also reform the consent and land transfer protocol to make the process faster and cheaper.
“Review of tenancy and repossession laws in the states,” Eleh suggested, pointing out that non-enforceability of tenancy and mortgage terms has remained a big disincentive to investors especially for low/income houses..
To improve quality of houses and high cost of labour, the former NIESV’s president urged that technical schools or institutes should train and certify artisans and technicians.
Training and certification, he is of the opinion can improve quality and bring down cost.
He called for proper regulation of the building sector to ensure that only certified and registered builders engage in construction work to ensure standards .
He wants government to increase investment in infrastructure such as roads, water and sewage treatment, among others to attract developers who are interested in low income houses.
