Mortgage/Housing Sector Requires Palliatives To Boost Activity’ - Akintayo Oloko

Following the global economic challenges experienced as a result of


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Mortgage/Housing Sector Requires Palliatives To Boost Activity’ - Akintayo Oloko


Following the global economic challenges experienced as a result of the COVID-19 pandemic, mortgage and finance expert, Akintayo Oloko, has said that the mortgage/housing sector will require palliatives and support in form of intervention funds, reduced transaction costs, to boost mortgage activity.

 

With the pandemic’s effect on nations, businesses and personal income, the Central Bank of Nigeria, CBN, has come up with a multi-trillion naira stimulus package, reduced interest rate on intervention loans, loan moratorium and permission for loan restructuring as palliative measures, which is commendable.

 

Oloko who has over two decades experience stressed that the mortgage/housing sector requires similar palliative, as there is the possibility that some salaries and self-employed income may also come under pressure. “We should have special fast track for building approvals during this period, reduction in building approval costs to bring down the associated cost of development, provision of off-take guarantees to developers which makes it easier to access funds for development or alternatively providing low cost funds for development.

 

“Federal or State governments can provide these or bodies set up by them to drive such initiatives, hence basic infrastructures including roads, water and power should be excluded from development costs to make homes more affordable.”

 

He however stressed that new mortgage transactions will likely be less than what is experienced in more robust economic conditions, hence concerted efforts could be made to avert any significant adverse effects on the sector. “There should be provision of intervention funds that will make single digit interest rates available for mortgages as a catalyst for enhancing the purchasing capacity of individual borrowers, the intervention funds should be long-term and possibly 15 years or more.”

 

The alumnus of Lagos Business school and IMD, Switzerland, added that allowing individuals access to a reasonable percentage (25% or more) of their RSA towards making a down payment for buying a home, special fast track approval for titling, perfection of mortgages to make it possible for more transactions to be done and reduction in titling, perfection costs to bring down the associated costs of taking a mortgage to own your home are a part of the comprehensive approach required for this unprecedented pandemic.


Copyright: Fresh Angle International (www.freshangleng.com)


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