Experts in Nigeria’s mortgage and housing sector have predicted that the coronavirus pandemic may trigger a wave of mortgage defaults in Nigeria, which could have a negative impact on the housing market.
Presently, mortgage servicers faces lamentable loss in the wake of coronavirus, because of the economic lockdown and the stay at home directives by governments. Further players in the housing market, buyers and sellers are being affected.
While several government agencies in other parts of the world are providing loan forbearance that could delay housing payments for months due to COVID-19, the same cannot be said of Nigeria. Also, financial institutions that invest in bundled mortgage securities are putting in protections, since it would be mortgage servicers and lenders that lose.
According to the umbrella body of Mortgage bankers in Nigeria, the Mortgage Banking Association of Nigeria (MBAN) want the country to take a cue from other countries to avert further default in mortgages.
MBAN President, Mr. Adeniyi Akinlusi, said COVID-19 cuts across economy and all industries and therefore requires proactive actions.
He commended Nigeria’s Central Bank’s credit relief of $136.6 million to businesses affected by the coronavirus pandemic.
According to him, many people who are taking mortgages are working in different sectors and COVID-19 affect their obligations. “This is the normal thing, we expect that if the people, who are employed lose their jobs, it will affect their obligations since many companies are not able to meet up because of the supply chain in China.
“Several countries have taken actions by asking them to take off one to two months to meet their obligations and the banks are not expected to take them as defaults.”
Akinlusi said since it is not something that is peculiar to Nigeria, “we can learn from what other countries are doing because the shock is global.
Similarly, the Chairman, Royal Institution of Chartered Surveyors (RICS) (Nigeria) and Vice President, International Real Estate Federation (FIABCI), Nigeria chapter, Mr. Gbenga Ismail said government should suspend tax for this month by giving a tax credit in a way to give back.
According to him, the pandemic is triggering defaults in many countries where monthly contract is the norm. So those who have payments and have not been at work for weeks will definitely default.
Source: blueprintng
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