According to BGL Research, the country has a housing deficit of around 16 million housing units as over 50 per cent of it 170 million people living in Nigerian are either homeless or without adequate housing.
In an attempt to reduce the deficit, the government launched the Nigerian Mortgage Refinance Corporation (NMRC) in January this year.
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“The lack of the mortgage market has been a long standing issue in Nigeria and even with the introduction of the NMRC, it’s not going to be a magic fix. It’s going to be a gradual process,” Munachi Okoye, Managing Director of MCO Real Estate told CNBC Africa.
The NMRC’s core aim is to provide affordable mortgages for Nigerians but with the high single digit interest rates, the masses are still sceptical.
“What I think is the number one issue is still affordability. The fact that interest rates are still very high so even when we have access to a mortgage at the lower end of the market, there is still an issue of affordability,” he said.
Addressing the issue of affordability at the launch of the refinance company, the current Minister of Finance, Dr Ngozi Okonjo-Iweala assured Nigerians that there will be mass housing schemes for the lower end of the market.
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“It’s the lower end where there is a huge demand for housing and where the NMRC ideally would have the most impact in bringing homes to the masses and that is where there is the highest affordability issue,” he explained.
With the elections scheduled for next year, the 14 states where the NMRC will pilot have promised to make land laws less stringent.
“It is in their interest especially as we are entering into an election year, it’s a very strong vote winner to provide housing for the masses and it’s also in their interest as it shows positive action from their part,” he added.