By Mimidoo Patrick
The Executive Director of Planning, Imani Group of Companies and a Board of Trustee of Real Estate Developers of Association of Nigeria, (REDAN), Mallam Suleiman Abubakar has appealed to mortgage institutions to extend the tenor of payment of mortgage for developers due to the impact of the coronavirus outbreak on the real estate sector.
Abukakar, who made the call during a telephone interview with Viewpoint Housing News in Abuja, noted that the pandemic has impacted on all sectors of the global and Nigerian economy.
He said the spread has grounded economic activities and the Real Estate sector is not isolated from it.
Abukakar stated, “I want to use this opportunity to appeal to the holders of mortgage facilities to extend the tenor of the mortgage to avoid developers from defaulting from payment.
“It should be done in such a way that if your mortgage is going to expire like in two years, it should be extended to two years and six months because most developers or landlords who have taken loan might not be able to continue with the payment as the economy had crumbled at one point due to the pandemic.
He added that to revive the mortgage sub-sector and reposition the housing financing institutions in the face of the pandemic, there was need for the institutions to backload the payment of mortgage to enable them recover their monies in the hand of developers or individuals who lack access to finance due to the pandemic that has affected global economy. “It will come like a gap between the mortgage period which could be paid at a later time. Those who have mortgages and possibly in the risk areas of losing their jobs will definitely have discussions with their lenders if that happens.
I think the mortgage firms have to listen and think of how to help them because the COVID situation is a force majeure, which nobody expected. People are being forced to make decisions that they did not plan to make,” he added.
This, indeed, is a trying time for the property market, but the reason is not far-fetched. “There is no economic activity going on anywhere because of Covid-19 and so, people are not earning income.
This has been made worse by the lockdown which has confined everybody to their house,” Abubakar explained. “Clearly, this is a very concerning time for many developers and our recent findings bring into focus the worries many have at the moment.”
He advises that mortgagees should get in touch with their lenders as soon as possible if they feel they may not be able to keep up with their terms payments “and we would encourage all mortgage facilities to be constructive in their conversations with developers who are struggling through no fault of their own during the current crisis,” he advised further.
Abubakar observed that such a move would help to mitigate the housing deficit, especially in the low and medium-income range.
The director also urged the government to provide palliative for the real estate sector to cushion the hard of the pandemic on the sector.
He called for a new model to drive policy for first-time homeowners.
He further called for wider industry collaboration between public and private sectors such as the Family Homes Fund, Nigerian Mortgage Refinancing Corporation and the Real Estate Development Association of Nigeria (REDAN).