Experts advocate more mortgage, real estate sectors investment in New Year

Despite low growth in the housing sector in 2020 due to COVID-19 pandemic that disrupted plans and activities, experts are expressing optimism in the New Year, calling for more investments in the sector. DAYO AYEYEMI reports.

AS curtain on year 2020 draws to a close in about 48 hours from now, affordable housing experts are eagerly calling on government, fund providers and other stakeholders to increase investment in the real estate and mortgage sectors of the economy in the New Year.

Besides, they urge stakeholders not to relent in striving towards a conducive housing and construction industry.

Their call becomes imperative following the serious impact of COVID-19 pandemic on the housing/real estate sector in the outgoing year.

It would be recalled that one of the challenges COVID-19 brought was the issue of lockdown and social distance.

Social distancing order became impossible in some communities due to overcrowding and shortage of housing units   for the urban poor.

COVID-19

Looking back during the lockdown, activities in the hospitality segment witnessed exceptionally low occupancies and reduced revenue from events and conferences.

Formal retail centres also suffered little to no foot traffic, which led to requests for greater rental concessions and tenant incentives.

According to report from Broll, reduced usage of office due to the lockdown encouraged occupiers to request for concessions while uncertainty slowed decision making.

Also, demand for residential in the high-end fell during this period while the middle to low income segments remained stable at worst despite a handful on rental concessions.

There was also spike in demand for storage facilities as various market segments target to stock up on goods to optimise for the bulk buying trend and e-commerce.

Key  themes  in real estate during COVID-19, the report said  included mass concessions, re-negotiation and restructuring activity, slowed decision making, stretched out project deliveries due to the lockdown and

Looking at the sector in retrospect, Executive Director, Housing Development Advocacy Network (HDAN), Mr Festus Adebayo; Managing Director, Rock of Ages Investment, Mr Francis Onwuemele; and Chief Executive Officer, Millard Fuller Foundation, Mr Sam Odia, noted in their end of the year messages that the sector really contended with COVID pandemic, which disrupted many plans and activities.

According to Adebayo, COVID-19 pandemic affected the performance of the housing sector and all operators in the real estate business in 2020.

This, he said manifested in the number of abandoned houses in various parts of the country.

“This certainly calls for some reflection. We will do our best to continue to champion the advocacy by partnering stakeholders in various areas that can bring a desired housing and mortgage sector that we can all be proud of,” he said.

Adebayo urged that all stakeholders must work harder to ensure a sector where Nigerian workers can have houses through affordable mortgages.

“Where building collapse will be drastically reduced or eliminated; where corruption and selfishness will not be the order of the day. We shall work for a sector that will boast of vibrant pressure groups that can advise the government on what to do,” Adebayo said.

Political will

The HDAN boss called on government to develop the political will to make Nigerian housing sector grow better, increase sales, create access to land, and solve the challenges of infrastructure.

He also appealed to all state governments to do more in the area of foreclosure law, while ensuring creation of access to land for developers

According to him, governors should show more interest in home ownership for their workers and citizens.

Given the country’s challenge with high unemployment, Adebayo is of the opinion that housing development should be a viable solution to closing that gap and creating a more vibrant economy.

“All that is needed for this to happen is for government to develop the necessary political will,” he said.

The best time to make this happens, he said was now, calling all government agencies in the sector to increase their performance and deliver on their mandates.

While calling on the National Assembly to remove all barriers to housing development through legislative interventions, Adebayo urged the Federal Ministry of Works and Housing (FMWH) to round up ongoing National Housing Programme projects “which will definitely lead to increase in the housing stock in the country.”

“Also, the issue of demand for housing should be critically looked into as those who need houses cannot afford them,” the HDAN’s executive director said.

To this end, he appealed to the FMWH to collaborate with relevant stakeholders and the National Assembly to formulate policies that can move the sector forward.

The HDAN’s executive director drew the attention of government on the need to recapitalise the Federal Mortgage Bank of Nigeria.

He said “The need for this cannot be overemphasised at this critical period that COVID-19 has made the whole world realise the importance of housing.”

Besides, Adebayo seized the occasion to call on the Federal Government, the Central Bank of Nigeria and the state governments to do everything possible in making the newly established social housing programme, being managed by Family Homes Funds (FHF), a success.

“We hope to see more collaboration among FHFL, Federal Housing Authority and FMBN in achieving the noble goal of delivering affordable housing for Nigerians in the New Year.

“We also call on the Federal Government to call for emergency dialogue with cement manufacturers on the present hike in cement price.”

Managing Director, Rock of Ages Investment, Mr Francis Onwuemele, pointed out that the day the Federal government and its institutions realised “there is a link between housing development on the demand side and mortgage, employment provision and poverty alleviation, the better for the economy.

Citing developed economies, he stated that mortgage scheme contributed 71 per cent to the Gross Domestic Products (GDP) in Canada and 68 per cent to United States’ GDP.

In Nigeria, he noted that contribution of mortgage to the country’s GDP was less than 2.5 per cent.

“If government realised that if I invest in housing seriously, I will not only increase GDP, I will be providing employments.”

To be able to do that, he said the federal authority required political will to bring investments into housing and mortgage sectors by giving houses to workers, who needed housing by creating a framework where mortgages  could be  paid back.

Pension fund

While canvassing on the need to look the way of pension fund for housing finance, he also put a caveat.

“For now as beautiful as the Pencom is, pension fund is a very fat cow but I fear that except we put a functional mortgage system on ground with the institutional framework, we should not tap the pension fund.

If the structure on ground is good, he is of the opinion that pension fund can provide a solution to Nigeria mortgage system and housing equation.

“Can government rise up a little bits and look at the link between GDP growth, housing and mortgage sectors and unemployment?” he said.

Odia said that despite the pandemic, his organisation was able to deliver 32-unit housing project, adding that the organisation is currently on the verge of delivering another 240 units of housing estate.

Besides, he said the company has commenced research into lowering the cost of delivering green and energy efficient homes.

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