Prices of homes are falling and investors are cashing in on the low prices to purchase homes. Prospective home owners are now prowling housing estates and other sales points, closing deals at prices below market rates.
One of the reasons for low prices is the Christmas season that has arrived. Property owners, including estate developers are now selling on discounts. Offers are being made to entice property buyers now and those who understand the market are now making purchases which they may resell when prices go up again.
Another reason why property prices are low now is because of the coming general elections. This is the campaign season and many politicians are selling off their homes and lands to raise money for their campaigns. So, a lot of properties from politicians have come into the market at below market rates, driving prices down. With a seeming glut in properties, even developers have been forced to reduce home prices.
Low property prices have also been helped by government’s sudden interest to reinvigorate the housing market. Several retreats last year by government agencies including the Ministry of Finance, Central Bank of Nigeria (CBN), Federal Ministry of Lands, Housing and Urban Development, along with housing development stakeholders have given rise to greater housing outputs like the 10,000 housing units being developed by the federal government to kick-start its first phase of the 10,000 mortgages being offered currently by the newly created Nigerian Mortgage Refinancing Company (NMRC).
The recent recapitalization of Primary Mortgage Institutions (PMI’s) by the CBN has liberalized mortgage funding, with the PMI’s having more funds to offer as mortgages and also going directly into construction of housing units on their own.
However, the Nigerian mortgage industry is still stunted by paucity of long term funds with the resultant effect that tenor of mortgages are too short to enable mass creation of mortgages. High interest rates thus characterize available mortgages.
With the coming on stream of the NMRC which offers mortgages with up to 20 years tenor, and recapitalization of the primary mortgage banks; it is hoped that housing finance through mortgages, a major impediment to affordable housing delivery, is now seriously being addressed by government.
The near-absence of a mortgage sector about a decade ago, juxtaposed with what promises to be a growing virile mortgage sector today, gives hope for the much desired era of mortgage-based affordable housing delivery. However, there are still many rivers to cross.
But for now, those who want to buy homes can benefit a lot by embarking on the purchase now. There are houses, new and old, available in the market at good discounts now. Enjoy the season’s low prices.