Experts in the real estate sector have called for reform in the nation’s mortgage sector to allow for long-term funding. They reasoned that the mortgage system as presently constituted does not provide the needed support for housing in Nigeria
Co-founder, DNJ Properties and Investment, Limited, John Okorie made the call at the launch of Phase II of the Vantage Courts Project in Lagos. According to him, “the mortgage system in Nigeria is not developed at all. It’s nothing near developed. So, in a situation whereby an individual has a mortgage plan, then before the mortgage can be given to us, it takes six to eight months and by then, the project is already done.
“So, we cannot wait that long. We need the money so we can continue with the project and get far, but we’ve had so many clients coming for the mortgage plans, but because of the duration of the time it takes for us to be funded, most of them lose out”, he said.
Similarly, former chairman of the Lagos State Branch of Nigerian Institution of Estate Surveyors and Valuers (NIESV), Stephen Jagun expressed worries that the mortgage system in Nigeria is not supportive enough.
Jagun, a past president of the Nigerian Chapter of the International Facility Management Association (IFMA) said, “mortgage is one of the easiest ways that the government can give leverage to the majority of citizens to climb the ladder in the housing sector and should be a form of social responsibility on the part of the government.
He stressed that the Nigerian mortgage rate is either outrageous or the tenure too short or the sum very inadequate. On his part, a fellow of the institution, Azuibike Unigwe, lamented that the interest rate of mortgage is prohibitive and not attractive to long term investment like housing.
Mortgage, he said, is usually a long term vehicle that is supposed to operate within a low-interest margin so that it will make some sense economically, coupled with the fact that Nigeria is largely a cash economy.
He said that the Central Bank of Nigeria (CBN) has tried to reduce the interest rate for the health sectors while the mortgage rate is still very high and it doesn’t encourage people to borrow. The Guardian
