Competition among developers has paved way for new marketing trends in the Nigerian real estate sector. Developers who must make giant strides have become innovative by creating new mortgage options for prospective buyer; they have taken advantage of the failed state of the Nigerian mortgage system by creating quasi-mortgage situations which appeal to prospective home owners, who are low income earners.
General Manager at Integax Property Resourcery, Audu Abraham, said, “we would not want to call it mortgage but a payment plan. So our payment plans have an advantage over professional mortgages out there. Buyers are not requested to bring collateral. A buyer’s collateral is his investment with the organisation and also the building.”
Abraham said that with Integax, buyers are free to always renegotiate when they are unable to meet payment deadlines, until both parties reach favourable agreement. “Concerning the payment plan, after making the initial investment of 40% for a property of say N5 million, the buyer is expected to make a monthly payment of 0.5% – which is 25,000 naira only,” he said
He said that when this continues, buyers make another bulk payment of 10%, after which they continue with monthly payments. In the second year, they make another 10% bulk and then you continue again with 25,000 naira monthly until 40% of the total cost is paid. Under the arrangement, buyers take procession of the building:
“He pays the remainder 60% over the next 3 years while he is living in the house, by which time Integax would have completed the house.” This manner of payment has attracted a lot of buyers who may not have saved enough money for a home.
Another Real Developer, Joseph Ozovehe of Graft Constructions limited who spoke to Blueprint said that intelligent developers have chosen to forget about government. “If you observe carefully, you will see that property developers in Nigeria are thinking out new ways of non monetary alternatives to mortgages because the government’s system has failed,” he said and added that housing loans from government agencies like the FMBN can hardly be accessed by common people while bank loans have deadly interest rates.
“No wise developer would take a bank loan with an interest rate that he will be unable to satisfy,” he said.
Apart from boycotting conventional mortgage, Innovative thinkers in the industry have aimed at solving the deficit problem through international partnerships with shelter-providing organisations. The partnerships, which is without the involvement of government is anchored by experienced property developers. Property expert, Peter Okolo, who wields experience as the first surveyor in the FCDA said, “I have met international partners and together, we will bring Green housing to Nigeria.” Okolo said that government’s plan to build a million houses was a huge joke as it failed to deliver earlier promises in the housing sector.
Okolo called on innovative businessmen in the housing sector to seek new ways of solving problems which may be with little or no government involvement. But the managing director of Anthill Concepts Limited, a management and business development consultancy, Chief Emeka Okengwu told Blueprint that government presence and participation was necessary for success of projects.
He feared that projects which have no government presence may in the end suffer frustration from government policies. Okengwu, who was also a member of the National Technical Working Group (NTWG) of Vision 20-20-20 further noted that the Nigerian housing sector was suffering from abandoned policies and incomplete project execution.
Filed Under: Property