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Comparing Nigerian Mortgage Structures to Global Standards mortgage

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Comparing Nigerian Mortgage Structures to Global Standards
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The mortgage industry serves as a crucial pillar in fostering homeownership, economic stability, and urban development worldwide. While the basic concept of mortgages remains consistent—providing loans to individuals to buy homes—the structures, regulations, and accessibility of mortgage systems vary significantly from one country to another. Nigeria’s mortgage structure offers unique insights, especially when compared to global standards. This article explores these differences, highlighting the challenges and opportunities within Nigeria’s mortgage system while drawing lessons from international best practices.

The mortgage industry serves as a crucial pillar in fostering homeownership, economic stability, and urban development worldwide. While the basic concept of mortgages remains consistent—providing loans to individuals to buy homes—the structures, regulations, and accessibility of mortgage systems vary significantly from one country to another. Nigeria’s mortgage structure offers unique insights, especially when compared to global standards. This article explores these differences, highlighting the challenges and opportunities within Nigeria’s mortgage system while drawing lessons from international best practices.

Overview of Nigerian Mortgage Structures
Nigeria’s mortgage system is primarily overseen by the Federal Mortgage Bank of Nigeria (FMBN), alongside commercial banks and primary mortgage institutions (PMIs). The key components of the system include:

National Housing Fund (NHF): Established in 1992, the NHF serves as a mandatory savings scheme where employees contribute 2.5% of their monthly salaries. Contributors can access low-interest mortgage loans through the fund.

Interest Rates: Mortgage interest rates in Nigeria typically range from 6% to 25%, depending on the institution and funding source. NHF loans are offered at subsidized rates of about 6%, whereas commercial mortgages attract much higher rates due to risk and inflation considerations.

Loan Tenure: Loan tenures in Nigeria usually span 5 to 20 years, with shorter tenures compared to developed countries. This limits affordability for many prospective homeowners.

Access and Eligibility:

Access to mortgages in Nigeria is constrained by high-interest rates, stringent collateral requirements, and insufficient credit infrastructure. This has resulted in a low mortgage penetration rate of less than 1% of GDP, compared to 50%-70% in advanced economies.

Comparing Global Standards
Interest Rates and Affordability
Globally, mortgage interest rates are influenced by central bank policies, inflation, and economic conditions. Developed nations such as the United States, Canada, and the United Kingdom offer relatively low-interest rates, typically between 2% and 6%. These low rates are supported by stable macroeconomic environments and robust financial markets. Conversely, Nigeria’s high inflation and macroeconomic instability contribute to elevated mortgage rates, reducing affordability for average citizens.

Loan Tenure

Longer loan tenures in advanced economies—often exceeding 30 years—help make monthly payments more affordable, enabling more people to access homeownership. In contrast, Nigeria’s shorter loan tenures increase the financial burden on borrowers, deterring participation in the mortgage market.

Credit Infrastructure
Developed countries have advanced credit scoring systems and frameworks that assess borrowers’ creditworthiness. This transparency reduces risk for lenders and broadens access to mortgage products. Nigeria, however, struggles with inadequate credit reporting systems and high default risks, further limiting mortgage availability.

Government Support and Policies
Countries with well-established mortgage markets benefit from government-backed initiatives. For example, the United States has Fannie Mae and Freddie Mac, which provide liquidity and stability to the housing finance market. Similarly, Canada’s Canada Mortgage and Housing Corporation (CMHC) ensures mortgage affordability and availability. In Nigeria, while the FMBN plays a central role, its resources and impact are limited, leaving significant gaps in housing finance.

Challenges in Nigeria’s Mortgage System
High Construction Costs: The cost of building materials and inadequate infrastructure make home construction expensive, exacerbating affordability issues.

Limited Secondary Market: Unlike developed nations with thriving secondary mortgage markets that provide liquidity, Nigeria lacks a well-functioning secondary market.

Low Housing Supply: An estimated housing deficit of over 20 million units hampers the effectiveness of the mortgage system, as demand far exceeds supply.

Macroeconomic Instability: Currency volatility, inflation, and inconsistent policies discourage long-term lending and investment in the housing sector.

Opportunities and Lessons from Global Best Practices
Developing a Secondary Mortgage Market: Establishing institutions similar to Fannie Mae or Freddie Mac could enhance liquidity in Nigeria’s mortgage market, enabling lenders to issue more loans.

Innovative Financing Models: Embracing alternative financing options such as rent-to-own schemes, micro-mortgages, and Islamic financing could expand access to affordable housing.

Strengthening Credit Infrastructure: Building robust credit reporting systems and financial literacy programs can improve trust between lenders and borrowers.

Government Incentives: Policies like tax incentives for developers, subsidies for low-income households, and reduced import duties on construction materials can stimulate growth in the housing sector.

Conclusion
Nigeria’s mortgage structure faces significant hurdles, including high-interest rates, short loan tenures, and inadequate housing supply. However, by adopting global best practices and tailoring them to local contexts, Nigeria can unlock the potential of its mortgage industry. Developing a robust and inclusive mortgage system is not just a financial imperative but a critical step toward addressing the country’s housing deficit and improving the quality of life for millions of Nigerians

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Federal High Court Rules in Favour of Adron Homes Over Estate Management Rights

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Federal High Court Rules in Favour of Adron Homes Over Estate Management Rights

In a legal victory for Adron Homes, the Federal High Court sitting in Abeokuta, Ogun State, has dismissed the suit brought by the Registered Trustees of the City of David Residents Association (CODRA) and five others, Elder Gbadebo Aromolaran, Mr. Adetokunbo Adeshile, Mr. Olaolu Ayinde, Olusegun Aba Yomi Esq, Oluwadamilare Awokoya Esq, against Adron Homes and Properties Limited.

The case, Suit No. FHC/AB/FHR/58/2023, was presided over by Hon. Justice Abiodun J. Adeyemi, who, after an exhaustive review of the claims and evidence presented, found the Applicants’ allegations to be unsubstantiated, speculative, and without merit.

The Applicants had alleged that Adron Homes infringed on their right to personal liberty. However, the court held that they failed to present any credible evidence showing that Adron Homes posed any threat or committed any act constituting a breach of their fundamental human rights.

Hon. Justice Adeyemi noted that there was no record or proof of any invitation, arrest, or action traceable to Adron Homes that could justify such a claim. He concluded that the allegations were merely speculative and unsupported by evidence.

On the claim of proscription and infringement of the Applicants’ right to freedom of association, the court ruled emphatically that Adron Homes has no power to proscribe CODRA or prevent residents from associating. However, in a critical clarification, the court affirmed that while residents are free to associate among themselves, the legal right to own, manage, and make administrative decisions concerning the estate remains vested in Adron Homes, as the rightful developer and manager.

Justice Adeyemi stressed that the court’s decision was guided strictly by evidence and the law, not by conjecture or subjective interpretation. Consequently, the Applicants’ case was dismissed in its entirety.

Despite Adron Homes’ victory in the lawsuit, the organisation’s true victory is in ensuring the well-being and satisfaction of all its subscribers and residents, and they will not relent in guaranteeing this.

This landmark judgement not only vindicates Adron Homes but also reaffirms its position as a law-abiding, customer-focused developer dedicated to delivering value and protecting the interests of its clients.

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Federal High Court Dismisses CODRAS’ Suit, Victory for Adron Homes

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Federal High Court Dismisses CODRAS’ Suit, Victory for Adron Homes

In a legal victory for Adron Homes, the Federal High Court sitting in Abeokuta, Ogun State, has dismissed the suit brought by the Registered Trustees of the City of David Residents Association (CODRA) and five others, Elder Gbadebo Aromolaran, Mr. Adetokunbo Adeshile, Mr. Olaolu Ayinde, Olusegun Aba Yomi Esq, Oluwadamilare Awokoya Esq, against Adron Homes and Properties Limited.

The case, Suit No. FHC/AB/FHR/58/2023, was presided over by Hon. Justice Abiodun J. Adeyemi, who, after an exhaustive review of the claims and evidence presented, found the Applicants’ allegations to be unsubstantiated, speculative, and without merit.

The Applicants had alleged that Adron Homes infringed on their right to personal liberty. However, the court held that they failed to present any credible evidence showing that Adron Homes posed any threat or committed any act constituting a breach of their fundamental human rights.

Hon. Justice Adeyemi noted that there was no record or proof of any invitation, arrest, or action traceable to Adron Homes that could justify such a claim. He concluded that the allegations were merely speculative and unsupported by evidence.

On the claim of proscription and infringement of the Applicants’ right to freedom of association, the court ruled emphatically that Adron Homes has no power to proscribe CODRA or prevent residents from associating. However, in a critical clarification, the court affirmed that while residents are free to associate among themselves, the legal right to own, manage, and make administrative decisions concerning the estate remains vested in Adron Homes, as the rightful developer and manager.

The court per Justice Adeyemi stressed that the court’s decision was guided strictly by evidence and the law, not by conjecture or subjective interpretation. Consequently, the Applicants’ case was dismissed in its entirety.

Despite Adron Homes’ victory in the lawsuit, the organisation’s true victory is in ensuring the wellbeing and satisfaction of all its subscribers and residents, and they will not relent in guaranteeing this.

This landmark judgement not only vindicates Adron Homes but also reaffirms its position as a law-abiding, customer-focused developer dedicated to delivering value and protecting the interests of its clients.

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NIESV Lagos Chairman Leads Delegation to Adron Homes, Seeks Strategic Collaboration

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NIESV Lagos Chairman Leads Delegation to Adron Homes, Seeks Strategic Collaboration

In a significant move toward fostering synergy between key players in the real estate sector, the Chairman of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos State Branch, ESV Tosin Kadiri, led a high-powered delegation on a courtesy visit to the Chairman of Adron Group, Sir Aare Adetola Emmanuelking KOF. The visit, which took place at the Adron Homes Head Office, demonstrated the growing need for strategic partnerships to accelerate housing delivery and professional integration within Nigeria’s real estate ecosystem.

Welcoming the NIESV delegation, the Group Chairman, Sir Aare Adetola Emmanuelking, a proud member of the Institute, shared an inspiring insight into the journey that birthed Adron Homes. He recalled his early professional experiences in estate management, which shaped his vision to transition into property development, not merely to build houses, but to create cities, communities, and homes that endure.

“Adron Homes was not born out of convenience, but of a calling,” he stated. “The industry is rife with challenges, but if you are truly called and driven by vision, you will stand out. We’ve seen many fall by the wayside, but with determination, resilience, and strategic thinking, we have continued to build and grow.”

He highlighted Adron’s innovative application of the labelling theory in estate development, thematically branding each estate to reflect cultural or geographic inspiration. This, he noted, along with Adron’s heavy investment in infrastructure, has set the company apart as a responsible, visionary, and futuristic developer.

Speaking on behalf of the visiting team, the Chairman of NIESV Lagos Branch, ESV Kadiri Tosin, lauded Adron Homes as a formidable pillar in the Nigerian real estate landscape. He admired the scale and consistency of Adron’s developments and emphasized the need for a more structured relationship between the Nigerian Institution of Estate Surveyors and Valuers (NIESV), and Adron Homes.

“We are here to seek collaboration. We believe that our members can tap into the vast structures and opportunities that Adron Homes has already created,” he stated. Adding to the discourse, the Chairman of the NIESV Cooperative Society echoed the call for a deeper partnership. He proposed a collaborative housing scheme wherein Adron Homes could allocate a zone within its existing estates for NIESV members to create bespoke properties, aligned with their professional dreams and financial capabilities. According to him, “This collaboration could bring our collective dream into the larger Adron vision.”

In addition, the NIESV Lagos Chairman proposed a strategic partnership where experienced members of the institute, particularly those with expertise in estate and facility management, can be integrated into Adron Homes’ operations to create added value across its estates.

In his response, Aare Adetola Emmanuelking welcomed the proposals with open arms, expressing optimism about the future of a deepened collaboration between both parties.

“We’ve enjoyed a cordial and mutually beneficial relationship with NIESV Lagos Branch in the past,” he said. “This administration brings renewed energy, and we are eager to deepen that relationship in meaningful and strategic ways. We are always open to working with professionals whose values align with our mission and vision.”

Members of the NIESV Lagos Branch delegation took turns to commend the impressive footprint of Adron Homes across the nation. One of the executives remarked, “This visit has been an eye-opener. As practitioners in the industry, we often underestimate the breadth and depth of being a real estate developer. Today, we’ve gained a new perspective, and more importantly, renewed inspiration.”

In attendance at the high-level meeting were several NIESV executives; the Vice-Chairman, ESV Ayodeji Odeleye, the Honorary Secretary, ESV Olaseni Lojede, among others, as well as Adron Group’s management team, including the Managing Director, Adenike Ajobo; the Group Company Secretary, Shola Orunmuyiwa; the Deputy Managing Director, Business Investment, Chitola Roberts; the Chief Press Secretary, Maureen Echefu; and the Personal Assistant to the Chairman, Faruq Salisu, among other company executives.

The meeting ended on a promising note, with both institutions expressing strong commitment to building a collaborative future. The engagement marks a pivotal step toward the professionalization of housing development and delivery, opening doors to mutually rewarding collaborations between developers and estate professionals.

With visionaries like Aare Adetola Emmanuelking at the helm, championing sustainable development and collaboration, the future of Nigeria’s real estate industry continues to look exceptionally bright.

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