The sale of luxury properties across the country has dropped significantly, stakeholders in the housing sector have said.
Real estate developers, who spoke with our correspondent, said most brokers, who used to sell as much as 10 high-end buildings in one year, ranging from N100m upwards, could hardly sell one presently.
The National General Secretary of the Real Estate Developers Association of Nigeria, Mr. Akintoye Adeoye, said the stock of unoccupied luxury apartments in Lagos, Abuja and Port Harcourt had risen significantly in the last few months.
According to him, only the sale of regular houses with mortgages has been fairly consistent among first- time home buyers.
He said, “The sale of property within N5m to N25m bracket where people can still get mortgages or where developers have to come up with plans that include paying gradually are not doing badly, they still sell but the sale of high-end properties has been very slow since the onset of the economic downturn.
“People are more careful about how they spend money now and even those who have the money are not willing to spend it. Unlike before when one person can buy about 10 luxury houses and keep the keys.
“Most of the people who buy houses now are first-time buyers who have no means to buy luxury apartments. Of course, there are some who still buy up to N45m worth of homes with mortgage but they are mostly those who work with blue-chip companies.”
Adeoye added that the situation had forced developers to reduce the prices of such apartments to woo buyers.
“But even with the drop in prices, people are not interested. There are some developers that can’t even sell one in a whole year because there is no mortgage for this group of properties. Those who buy them get money from other sources but those sources are no longer available,” he said.
The Principal Partner, Bode Adediji Partnership, Mr. Bode Adediji, said apart from the economic downturn, some of the reasons for the drop in sales were oversupply and insecurity especially for expatriates who were mostly the target for such buildings.
Adediji, who is also a former President of the Nigerian Institution of Estate Surveyors and Valuers, said, “There is no doubt that the recession is particularly evident in the housing sector especially the luxury apartment end.
“The reasons for it are understandable; there is oversupply and the employment regime where employers bring in people from abroad and put them in luxury apartments has been phased out. They rather put them in a hotel and when they are through with their job, they leave. They also don’t bring their family because of security issues.”
An estate surveyor and valuer, and former President of NIESV, Mr. Emeka Eleh, said take up of luxury apartments, particularly in Ikoyi where there are several unoccupied buildings, had dropped significantly in recent times.
“The real estate market is a representation of the overall economy; if the economy is not doing well, the sector won’t do well,” he said.
Union Bank Announces the Appointment of Aisha Abubakar as Independent Non-Executive Director
Union Bank of Nigeria Plc (“Union Bank”) has announced a change to the membership of its Board of Directors with the appointment of Ms. Aisha Abubakar as an Independent Non-Executive Director effective 9th September 2021, following the approval of the Central Bank of Nigeria (CBN).
Ms. Abubakar joins the Board of Union Bank following her tenure as Nigeria’s Honourable Minister for Women Affairs and Social Development from 2018 to 2019. Prior to this, she also served as the Honourable Minister of State for Industry, Trade and Investment between 2015 and 2018. At the start of her career, Ms. Abubakar worked at Continental Merchant Bank Ltd., African Development Bank and African International Bank.
She is an accomplished public sector administrator with over three decades of professional experience in Public Service and Pension Administration, Investment Banking, SME Finance/Rural Enterprise Development and Micro-Credit Administration.
Ms. Abubakar is a Fellow of the International Professional Managers Association (IPMA-UK), and the President of the International Experts Consultants (IEC-UK).
Commenting on the addition to the Board, Mrs. Beatrice Hamza Bassey, Union Bank’s Board Chair said: “On behalf of the Board of Directors, I welcome Ms. Aisha Abubakar to the Board. She brings many years of robust experience which will be invaluable in supporting our efforts to steer the Bank forward and deliver on our strategic objectives.”
Also commenting, Chief Executive Officer, Mr. Emeka Okonkwo said: “I am pleased to welcome our new Independent Non-Executive Director, Ms. Aisha Abubakar to the Board. We look forward to drawing from her wealth of experience and fresh perspectives as we continue to execute our vision to be Nigeria’s most reliable and trusted partner.”
AfDB Approves $50M Trade Finance Deal with Standard Chartered Bank
The African Development Bank Group has approved a $50m Trade Finance Unfunded Risk Participation Agreement (RPA) for StandardChartered Bank.
This was contained in a statement titled ‘African Development Bank approves a $50m Multinational Trade Finance Risk Participation Agreement facility for Standard Chartered Bank’ published on the bank’s website on Wednesday.
The statement said, “The board of directors of the African Development Bank Group has approved a $50m Trade Finance Unfunded Risk Participation Agreement facility between the African Development Bank and Standard Chartered Bank.”
The essence of this agreement is to promote intra-Africa trade, ensure regional integration and lessen the trade finance gap in Africa.
“The agreement is expected to boost intra-Africa trade, promote regional integration, and contribute to the reduction of the trade finance gap in Africa, in line with implementation aspirations of the African Continental Free Trade Area,”
The bank’s Director for Financial Sector Development, Stefan Nalletamby, stated that “We are excited about finalising this facility with Standard Chartered Bank as it offers us the flexibility to use our strong AAA-rated risk-bearing capacity to increase access to trade finance and boost intra/extra-African trade on the continent, in support of the AfCFTA.
“This partnership is expected to catalyze more than $600m in value of trade finance transactions across multi-sectors such as agriculture, manufacturing and energy over the next three years.”
Director-General of the bank’s Southern Africa region, Leila Mokadem, was quoted to have said, “The advent of COVID-19, coupled with stringent regulatory/capital requirements and Know Your Customer compliance enforcement, has seen many global banks reduce their correspondent banking relationships in Africa, while some are exiting the market altogether.
“There is, therefore, an urgent need for financing to reenergise Africa’s trade, which requires more participation of institutions like the African Development Bank.”
The parties in the agreement are expected to share the default risk on a portfolio of eligible trade transactions originated by African Issuing Banks and indemnified by Standard Chartered Bank.
Beneficiaries of this facility are issuing banks in Africa with the ability to grow their trade finance business has been constrained by inadequate trade confirmation lines from international banks.
Other beneficiaries are small and medium enterprises (SMEs) and domestic firms which rely on these issuing banks to fulfill their trade finance commitments.
The RPA facility is aligned with the AfDB’s High 5 priority goals which are: light up and power Africa, feed Africa, industrialize Africa, integrate Africa, and improve the quality of life for the people of Africa.
Standard Chartered Launches Flexible ‘Smart Business Loan’ Product To Support SMEs
Standard Chartered on Wednesday launched its Smart Business Loan (SBL) product to support Small and Medium Scale Enterprise (SMEs) in Nigeria.
David Idoru, Head of Consumer, Private and Business Banking, of the bank in Nigeria, said in a statement in Lagos that SBL was an unsecured installment/term loan available to SME clients within key target sectors.
“Qualified SMEs would be able to access up to N20million loan, without providing tangible security/collateral to purchase asset, finance business expansion and other capital expenditure needs.
“This loan was designed to help SMEs meet their short to medium-term needs.
“As a Bank, our purpose is to drive commerce and prosperity in the locations we operate in. This is done through offering cash, lending, trade and wealth management solutions that specifically drive economic growth,” he said.
Idoru said that the bank was constantly looking for ways to ensure SMEs get access to the needed support to enable their businesses to thrive, adding that prior to the product launch, clients were required to provide full collateral cover to access loans from the bank, but SBL had been designed to provide the necessary flexibility to the clients.
“It is accessible to new and existing clients of the Bank with no waiting period, including small and medium scale organisations, who can access up to N20million in loans without collateral for a maximum tenure of two years,” he said.
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