Increased Affordable Housing Will Deepen

The director of Other Financial Institution Supervision Department (OFISD), Central Bank of Nigeria (CBN), Alhaji Ahmed Abdullahi, has stated that the increasing stock of affordable housing would accelerate the growth of middle class and deepen the mortgage market stressing that the industry could contribute to social and political stability.
Abdullahi, who stated this in Abuja at an event organised by Mortgage Banking Association of Nigeria (MBAN) noted that achieving relative macroeconomic stability, access to pool of long term capital, creating the necessary legal and regulatory infrastructure to back collateralised lending, encouraging competition among housing finance institutions, and ensuring that the appropriate risk-management are keys to effective housing finance system.
He disclosed that investment in mortgage industry is capable of raising Nigeria’s Gross Domestic Product (GDP) to 70 to 80 percent of its present size saying that investment in housing construction would accelerate growth in other sectors on the value chain.
According to him, “Housing finance can also have desirable spillover effects on both the financial system and social cohesion as only 5 percent of existing housing stock are estimated to be financed by mortgages while houses are personally built 100 per cent with savings in Nigeria.
He listed absence of long-term capital and poor business environment as the major constraints to the growth and development of Nigeria mortgage market stressing that the industry is under-developed with total assets of only N386 billion as at end June, 2016, representing 0.24 per cent of GDP compared to 70 per cent in other jurisdictions.