LATEST NEWS

http://meganewsng.com/media/k2/items/cache/65eb99de7f31e7479a8853734ca0c7ac_M.jpg

Daylight Rape in Lagos Streets

It was on Wednesday, March 3, 2017 that Lagos set a record on the deteriorating values Africans are known for. This day represents the worse day for some innocent secondary school ..... ...

{LatestNews}

0 : Comments Not rated yet Tweet More

The Senate in Confusion as Another member dumps PDP, joins APC amid protest from colleagues

The population of the Peoples Democratic Party membership in the Senate has been further depleted with the defection of a member - Senator John Enoh....  

How Governor Tanko Almakura Has turned his People to IDPs…… While Governor Simon Lalong endears himself to his People.

Governor Tanko Almakura has been accused by Group Captain ZR ZAKKA PhD, mni for exhibiting an attitude that shows the governor has turned Nasarawa State into a personal estate.

Breaking: Federal Government abolishes HND/BSc dichotomy.

Minna, capital of Niger State, Nigeria is the location where the Council of Establishment consisting of all the Heads of Services of the 36 States of.......

Breaking: SGF Lawal Babachir and DG NIA, Ayo Oke Suspended; Oke weeps when denied access to Vice President

President Muhammadu Buhari has suspended the duo of Mr Lawal Babachir and Ayo Oke, both SGF and DG NIA respectively.  

OPINIONS

Why over 90% of residential developments are ‘dead assets’

If there is any sector of the Nigerian economy where government’s action or inaction obstructs due process and retards growth, that sector is housing.

The housing market in the country is largely underdeveloped because government has failed to come up with a deliberate policy to grow the mortgage system which, elsewhere in the world, drives housing development and homeownership.

For a country of 160 million people, the housing stock in the country is estimated to be a little above 10 million units; homeownership is said to be only 10 percent as against 92 percent in Singapore, while the housing demand-supply gap is in the region of 16 million units.

Experts explain that the reason for this poor housing situation is, among other factors, that there is no functional mortgage system, adding that the slow growth of the sector is because of its relative newness such that many people don’t understand why they should save their money in mortgage banks.

The bigger challenge in the slow growth of the mortgage sector is that over 90 percent of the few residential developments are not covered by any form of mortgage.

“Of the 10.7 million housing units in Nigeria, 10 percent of which is self-built, only about 5 percent is in formal mortgage,” Ajila Dare, a mortgage originator and adviser, disclosed to BusinessDay.

Dare, who spoke in an interview with our correspondent, explained that effectively about 95 percent of home equity/savings in residential developments are ‘dead assets’, estimating that mortgage finance requirement for the country stands at between N15-20 trillion.

Many residential developments in Nigeria were built or bought without recourse to mortgage due to the many constraints that have to be overcome in securing the facility from mortgage institutions.

These constraints are regulatory, financial and operational, and Dare explained that ownership and management of land are encumbered by the administrative difficulties in issuance of Governor’s Consent.

He added that apart from poor land registry practices, compensation for land is based on ‘fair compensation’ which is based on diverse interpretations, noting that there is absence of an overarching legal and regulatory framework for the housing industry.

“Limited access to long-term funding; lengthy, rigid and ineffective foreclosure procedures; non-vibrancy of primary mortgage institutions and low level of participation in the National Housing Fund (NHF) are some of the financial constraints,” he said.

Operational costs, he said, manifest in high cost of housing developments such as building materials, land acquisition and transaction costs and reliance on expensive and conventional construction procedures, adding that inefficient land management and urban planning system also contribute to operational cost.

“Low level of infrastructure provision for housing units developed, skills shortage and insufficient capacity building are also part of the operational costs and should be addressed,” he advised.

Some experts argue that part of the reasons for the low mortgage facility for residential development is mortgage operators’ demand for equity contribution as prerequisite for mortgage loan.

Industry operators, however, say such contribution is necessary for a number of reasons including the need to protect depositors’ money; need to hedge against default; lack of sound database on Nigerians, among others. Equity contribution, they explain, is as fundamental to mortgage lending as regular flow of income.

Toyin Banjo, former managing director and chief executive officer of Cornerstone Mortgages (mortgage bankers), said that banks usually demand equity contribution from loan seekers because there are institutional and regulatory developments that are still lacking in the industry.

“We don’t have a sound database of Nigerians, the National ID Card is still a flop and foreclosure laws are still not strong,” he said, arguing that if the banks had all the above issues resolved, they would give people mortgage based on their credit rating.

Banjo added that as financial intermediators, it is the responsibility of mortgage banks to protect depositors’ money, stressing that for them to protect those deposits, they have to ask for something that would act as a back-up to the money they give out to borrowers.

Read 2259 times

RELIGION

Nasarawa State: Which Way Forward For Christians?

Let me first thank you the organizers of this meeting of Christians in Nasarawa State for inviting me to speak to you today on the present prevailing situation that has adversely affected us as a people and a church. I see your invitation to me as a privilege for me to be used by...

WORLD NEWS

9/11 Survivor Captured In Iconic Photo Dies Of Cancer

Marcy Borders, a survivor of the Sept. 11 terrorist attacks who was photographed covered in dust after fleeing the World Trade Center, has died of stomach cancer. Borders' family announced her death Tuesday on Facebook. She was diagnosed with stomach cancer last year at the age o...

SPORTS NEWS

Africa's richest man, Nigeria's Dangote, plans to bid for Arsenal soccer club

Lagos - Africa's richest man, Nigerian Aliko Dangote, announced on Thursday that he wanted to buy English soccer team Arsenal and would make a bid "at the right time". Also read: Super Falcons to return Saturday after poor show Dangote, 58, is listed as the 67th richest person ...

NIGERIAN NEWS

A NOTE OF CAUTION TO APC – DELE MOMODU

Fellow Nigerians, let me state my interest in APC very clearly and urgently in order to clear any lingering ambiguity on the matter. I’m not a card carrying member of APC and have no intention of being one in the near future. I remain a member of the National Conscience Party des...