By Kingsley Adegboye with Agency report
AGAINST the backdrop of the huge capital expenditure involved in mass housing development, housing experts have said the sector requires appropriate finance, insisting that finance is a critical ingredient in housing development. This is the submission of the experts who spoke at various forums.
Recently, the Managing Director,Federal Mortgage Bank of Nigeria FMBN, Ahmed Musa Dangiwa, an architect, disclosed in Abuja that meeting the affordable mass housing needs of Nigeria remains a major challenge, with estimated 17 million housing deficit in the country, which is anticipated to cost about N60 trillion.
Dangiwa added that the present administration will develop a well functioning mortgage finance market that is able to attract large, long-term local and foreign investments needed to promote a vibrant, competitive, innovative and sustainable housing market driven primarily by private sector and public-private partnership, PPP, with FMBN acting as a facilitator, regulator and enabler to be able to meet the country’s housing finance.
Also, a real estate developer, Mr. Alex Adefarasin, who spoke with Vanguard Homes & Property on housing financing, said the cost is huge, and it is a major challenge for the sector, pointing out that developers are confronted with challenges in accessing finance from banks.
He noted that developers are usually required to meet strict loan requirements, adding that due to the stringent conditions attached to borrowing from banks in Nigeria, most developers especially low-income earners do not have access to finance for housing. He therefore called for policy frame work that will make developers have access to finance for housing with less stringent consitions.
Equally bemoaning huge finance required for housing, Marja Hoek Smit of Wharton School, University of Pennsylvania USA, has said that housing finance is critical to solve the increasing housing problem, as it does, the number of households that can afford to acquire a house in the formal market, which in turn will make large scale development of middle and lower middle income housing possible.
Hoek Smit who is the Director of the International Housing Finance Programme at the Wharton School Zell/Lurie Real Estate Center, and an Adjunct Professor in the Wharton Real Estate Department of University of Pennsylvania, disclosed this at a UN-Habitat forum recently in a lecture she delivered According to the housing expert, access to housing finance is described as equally important for investors in rental housing of all types.
The speaker who discussed the positive characteristics of mortgage lending compared to alternative housing finance options, as well as the reasons for mortgage systems to remain small in many urbanizing emerging market countries, called for changes in policy to address these constraints.
She noted that “The Mass Housing Finance approach draws on housing finance system such as macro-economic and urbanization data collected by the Housing Finance Information Network HOFINET, for more than 130 countries and on country case studies of successful approaches to expand access to housing finance”.
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