‘Houses are available but no buyers’

What are the challenges facing real estate sector in the country? One of the major challenges facing the real estate sector is the inability of the ordinary Nigerian to afford a good home. The ordinary Nigerian has no money to pay for a house even when houses are provided by developers. Developers would build houses […]

What are the challenges facing real estate sector in the country?
One of the major challenges facing the real estate sector is the inability of the ordinary Nigerian to afford a good home. The ordinary Nigerian has no money to pay for a house even when houses are provided by developers. Developers would build houses and nobody would come for them due to lack of fund.
Another critical issue in the sector is lack of access to mortgage by both the developers and Nigerians.

What are the hurdles to accessing mortgage?
There are many factors affecting mortgage financing in Nigeria. The capacity of the Primary Mortgage Institutions (PMIs) which serve as the vehicle through which citizens can access the National Housing Fund (NHF) is too small. These PMIs are really not financially strong enough to provide the needed fund to the people. It is not long that their minimum capital base was raised to N200 million and how much is that compared to those who want to access fund for housing.
Secondly, the Federal Mortgage Bank of Nigeria (FMBN) is not fully funded to meet the needs of developers as well as people in terms of access to loan. The bank is not fully funded because their capital base was raised to N5 billion recently. If developers have access to mortgage and loan, it would be better for the country.

The PMIs and FMBN do not have fund to give to those seeking loans. People would apply for loan and after the necessary documentations, they would have to wait for a long period without accessing the fund. And that affects the building and construction industry.
The cumbersome legal process of documentation that one has to go through to enable him access financial housing fund is another issue. It ranges from having to register with NHF, land title, having a steady income and coming up with 10 percent equity contribution for you to have access to mortgage. How many Nigerians can afford all these processes, especially 10 percent equity contribution. So FMBN  should be funded to meet the needs of developers and Nigerians.

What do you think is the way out of the 17 million housing deficit?
I think the way out of the 17 million housing deficit is for the Federal Government to make access to mortgage easier, open the market, support the FMBN with the injection of needed capital which will enable it to be fully functional. I think if that is done, it would be easier for developers to produce houses and the people who want to own a house can also afford it.
Also, the Federal Government should encourage private investors in the housing sector. The private investors are optimistic about the sector but they are reluctant because of the perceived lack of attention given to the sector by the Federal Government. The housing sector is one sector that if properly harnessed can do more than just giving Nigerians homes. If the market is well established, many people would be employed, more houses would be provided and the deficit we are talking about would not be there.

What would you say is responsible for incessant building collapse in the country?
Building collapse is of three faces: one has to do with lack of supervision by authorities in charge of monitoring; two is the use of poor quality materials in the building; while the third one has to do with employing the services of unqualified professionals by builders. You need to have qualified engineers for supervision and also use quality materials to avoid that. Once you employ the service of professionals you get a better work and the building would not collapse.

It seems the property market is saturated as some developer claimed there are no immediate returns of investment?
I don’t believe the property market is saturated because we have about 17 million housing deficit in the country. I think the issue is access to fund to be able to own a house by ordinary Nigerians. If the government pumps more money into the sector, the issue of poor market or no immediate returns on investment would not be there. Houses are there but no buyers because of the economy and lack access to mortgage.

Builtoption is relatively young in the real estate sector. How has it been so far?
Builtoption started business in 2014. I think what made our company to succeed is our understanding of the sector as well as commitment to safety and standards. In competitive industry like ours, the only way to come out strong is to have a certain standard that you would be identified with. We want to be the leading company in the building industry. We are currently building over 150 housing units and about 36 units of four bed-room have already been completed.