Real estate experts in West Africa have urged governments to develop a virile mortgage system to provide homeownership access.
The experts also emphasized the need for increased funding for real estate projects, listing more Real Estate Investment Trusts (REITs) for further investment, green building, technology for housing construction, and decentralizing housing development in city centers.
They spoke at the 8th edition of the West Africa Property Investment Summit (WAPI), entitled, ‘New Frontiers in the New Normal’, held in Lagos.
The Managing Director of Dutum Company Limited, Mr. Temitope Runsewe, said the African real estate sector has great potential, especially in Nigeria. Specifically, he said there are no thriving mortgage systems in Nigeria, whereas anywhere in the world, the mortgage sector grows the real estate sector. He said a virile mortgage system has to be initiated by a government to add value to the sector, adding that the government needs to fund the sector.
“In Nigeria, the Federal Government has set up a seed fund of about N100 billion for the Family Homes Fund to support homeownership. “The government should create a pool, whereby mortgage banks can access funds and lend to customers. The Federal Mortgage Bank of Nigeria should be revived for efficiency, while the Nigeria Mortgage Refinance Company (NMRC), should be capitalized with proper structure,” Runsewe said.
“That made us research emerging technologies to make our work faster and more efficient. We have seen the need to be more climate-friendly in construction and building greener houses because the environment is becoming a major issue demanding everyone’s attention. “The challenge of funding has to do with the macro-economic situation in any country. When you have stability in currency, the foreign direct investment will come,” he said.
The Head of Real Estate Finance-West Africa for Stanbic IBTC, West Africa, Mr. Tola Akinhanmi, enumerated funding options available for real estate finance, which are meant for a credible developer with innovative products, financial strength, and sustainable assets.
He explained that it becomes difficult to harness opportunities when an industry is fragmented. According to him, stakeholders need to remove opaqueness by sharing information, growing the market, and creating the right framework that will enable investors to support investment.
A senior official of Pennek Nigeria Limited, Michael Obiaju, said real estate is a goldmine in Nigeria. However, he said the developments are concentrated in certain demographic zones like Lagos, Abuja, and Port Harcourt. Hence, a policy needs to decentralize developments, reduce pressure on urban centers and stop urban migration.
He said:“ If the government comes up with policies that engineer funding for housing, mortgage avenue and deploy more of the pension fund, these will create more opportunities in the real estate sector.”
The Senior Director, Development-Africa for Radisson Group, Erwan Garnier, said the hospitality sector has been resilient in 2022 due to huge population, currency devaluation, and COVID-19, which made traveling expensive.
He said the firm opened 16 hotels in Africa and targets key cities in Lagos, Abuja, and Port Harcourt to expand the market, adding that the forecast for the industry in 2023 is positive.