KEY POINTS
- REDAN says high interest rates and limited long-term funding are making mortgage finance difficult to access.
- Developers and homebuyers are increasingly relying on personal savings, self-financing and instalment payment schemes.
- The association wants stronger mortgage institutions, increased National Housing Fund funding and more sustainable financing models.
- REDAN says affordable capital is necessary to increase housing supply and improve building quality.
MAIN STORY
High interest rates, inadequate long-term funding and lengthy approval processes are limiting access to mortgage finance and slowing housing delivery in Nigeria, the Real Estate Developers Association of Nigeria (REDAN) has said.
REDAN President, Oba Akintoye Adeoye, identified the challenges at the two-day Mortgage Finance Roundtable 2.0 held on Friday in Abuja.
Reports show that the event, organised by the Mortgage Banking Association of Nigeria, had the theme, “Mortgage Finance in Nigeria: Building Resilience, Partnership and Scale”.
Adeoye said the difficulties in accessing mortgage finance had forced many Nigerians and property developers to rely on alternative funding arrangements, including personal savings, self-financing, instalment payment schemes and site-and-services models.
While these arrangements had helped sustain housing delivery, he said they could not provide the level of funding required to meet the country’s housing needs.
“In our country, Nigeria, access to mortgage finance remains a major challenge due to high interest rates, limited availability of long-term funds and lengthy mortgage approval processes.
“These challenges have compelled many Nigerians and estate developers to adopt financing engagements, including personal savings, self-financing, instalment payment schemes and site and services models.
“These approaches have helped sustain housing delivery, but they are not sufficient to achieve the scale required to address our housing needs,” he said.
THE ISSUES
The concerns raised by REDAN highlight the difficulty of financing housing projects and making homes affordable to buyers in a market where mortgage funding remains difficult to secure.
For developers, limited access to affordable capital can restrict the number of houses they can build and affect the quality of projects. For prospective homeowners, high borrowing costs and lengthy approval processes make mortgage-backed purchases harder to pursue.
Adeoye said addressing these constraints would require strengthening the mortgage system, increasing funding for the National Housing Fund (NHF) and developing financing models suited to local market conditions.
“To make affordable housing more accessible to Nigerians, we must strengthen the mortgage system, increase funding for the NHF scheme under the administration of the Federal Mortgage Bank of Nigeria.
“We also need to develop innovative and sustainable financing models that address the realities of our markets,” he said.
WHAT’S BEING SAID
Adeoye said access to finance was central to increasing housing supply and improving the quality of developments.
“If we want to deliver more houses, we need increased access to finance. If we want better quality development, we need affordable capital.
“If we want more Nigerian families to become homeowners, we need accessible, affordable and sustainable mortgage products,” he said.
He urged property developers, mortgage institutions, government regulators and investors to strengthen partnerships and turn their commitments into practical measures to improve housing delivery.
WHAT’S NEXT
REDAN wants greater collaboration among developers, mortgage banks, regulators and investors to expand funding options and improve access to housing finance.
The association also called for increased contributions to the National Housing Fund and the development of mortgage products that more Nigerians can afford.
BOTTOM LINE
Nigeria’s housing delivery challenge is not only about building more homes. It is also about securing funding that developers can afford and creating mortgage products that allow households to buy those homes. REDAN says progress on both fronts is necessary to expand homeownership.
