Housing Sector Urges Federal Government to Boost Mortgage Collaboration
Operators in Nigeria’s housing sector have called for stronger collaboration between the Federal Government and financial institutions to revitalise the country’s struggling mortgage system. This appeal was made during the unveiling and site premiere of Noble Grounds’ Pleasant Hills Estate in Ogun State.
Olajide Dosunmu, Managing Director of Noble Grounds, highlighted the fundamental challenges plaguing the Nigerian mortgage sector. He noted that inflation, currently over 33%, poses a significant hurdle. “The main issue is that inflation increases the cost of borrowing,” Dosunmu explained. “Banks add lending rates, the monetary policy rate on inflation, and their charges, making loans prohibitively expensive. At repayment, the devalued naira means the amount owed has increased significantly. It is the government’s responsibility to control soaring inflation to make mortgages viable.”
Shola Adio-Moses, Branch Manager of Wema Bank, Opebi, Ikeja, Lagos, contrasted Nigeria’s situation with developed countries where the government plays a crucial role in the mortgage sector. “In developed countries, long-term mortgages are standard. In Nigeria, mortgages are commercialised with tenures of five to seven years. This sector needs a holistic approach where the government collaborates closely with the finance industry.”
Dosunmu also underscored the urgent need for more housing due to significant rural-urban migration into Lagos. “Affordable homes are essential. We anticipate more high-rise buildings by the government to accommodate people at subsidised rates.”
Regarding Pleasant Hills Estate, Dosunmu assured that the estate has a registered survey with the Ogun State government, layout approval, and is in the process of obtaining a global Certificate of Occupancy (C of O). “Given the substantial increase in C of O costs, we are negotiating with the Ogun State Government to perfect individual titles for each owner, which involves a substantial financial outlay of N600 to N700 million.”
The call for government action and financial collaboration aims to address these challenges and make homeownership more accessible for Nigerians.
