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Founding chairman of Africa Property Investment Group (AFPING), Mr. Chudi Kalu has given fresh insight on why mortgage housing delivery is not working in Nigeria housing market.
He said even with the introduction of the Nigerian Mortgage Refinancing Company (NMRC), not much has been achieved over the years.
Explaining more in an interview, Kalu said “I think that for any project to attract investors, the onus is on the developer to make his project attractive. Our problem is not money, our problem currently is investment”.
“Is your project investment driven? Have we created a project that an investor will look at and just smile that his money is safe, his investment is secured?
“So, it is not just that mortgage is not working, it is just about the fact that nobody wants to put his money or engages in anything that will fail. The problem is not with the investor neither is it with the mortgage system. The problem is with the developers. What kind of development are we creating?
“Now, we currently have a problem as developers because there is this wave of land sales all over the country and that is what people call estate. Our problem is not land deficit but housing deficit, so if we can’t make the project attractive, investors will not come. If they are attractive, investors will come from different corners.
“What it means is that owing to the boom in technology, people are now investing in the technological sector. One must do a business in technology that is driven by cash flow so that when I put out my business, people will rush out and take advantage of that project. So it is not majorly about investors coming in, it is about positioning myself so that investors can take advantage of my project.
On the high price of building materials, AFPING boss said “the high price of building materials won’t go away because of the fact that we have enormous deficit. Until we are able to do housing on mass level, that is when we will be able to crash the price of building materials”. “Currently, we are doing less than 120,000 houses per year and that is very poor. We need to do at least one million housing per year. Until we are able to come to that level, we will continue to have it so. Imagine you are a plumber who is supplying materials to just a few persons, that means you can only supply to about 100 houses and how many people do we have to supply?
“So we need to do volumes in terms of mass housing so that a lot of people can now take advantage of that market. That is when cost of building materials and cost of housing can come down.