A fellow of the Nigeria Institute of Quantity Surveyors, Mr Yemi Ejidiran, has disclosed that the Covid-19 pandemic has greatly affected the real estate sector, lamenting that the development has forced some Nigerians to have lesser interest in owning homes.
He said with poor disposable income, some Nigerians do not worry about buying homes but only interested in eating.
Ejidiran, who spoke in an interview recently, also disclosed that inadequate mortgage facilities had affected homeownership negatively in the country.
He said: “Covid-19has badly affected real estate and generally speaking, I think that real estate is the worst hit. The reality of the matter is that when there is poor disposable income, people do not worry about buying homes, people are interested in eating. In some cases, they may find one or two clothes to wear. But real estate is the least of their priority; so it has affected us badly.
“So, we find a situation wherein most of our commercial premises, we lost our tenants, it has been difficult recovering service charges.There has been increase in rental payment default, most of our tenants are actually leaving premises to work from home or go to some co-work office spaces to be able to exercise their franchise.
“Also, inadequate mortgage facilities have affected homeownership negatively in the country. The reality of the matter is that the mortgage facilities, both primary and secondary, have not evolved to a state what you have in Europe and America, where there is government intervention in terms of mortgage investment that enables prospective homeowners to buy their homes and be happy thereafter.
“One of the major reasons is the purchasing power of our people, especially in Nigeria which had dwindled considerably even before the Covid-19 pandemic. A mortgage facility operates at the back of your ability to be able to repay the loan and the guiding principle is that at least 33 percent of your monthly or your annual income must be available for that repayment.
“In a situation where workers had to spend literally all their earnings on daily living, feeding, clothing extended family system, there is practically nothing left to fund mortgage repayment and that has badly affected home purchases.
“I also observed that the cost of building is also skyrocketing and that makes it practically impossible for people to access home. The primary mortgage system also requires a lot of fine-tuning, while the secondary mortgage system is literally not even there.
“Ability to raise finance to fund the secondary mortgage system is not really there and the government has not done much in this area. So, those are the challenges I see in mortgage facilities that have affected home purchases in Nigeria”.