Real estate Firms Borrow N2.26tn in Eight Months - CBN Report
According to the investigations, these bank-sourced funds were invested as capital to expand their services within the sector and the loan sums acquired between November 2022 and June 2023 showed a significant increase, rising from N1.90 trillion to N2.26 trillion, marking an 18.9 percent growth.
Despite the Central Bank's decision to increase the benchmark interest rate from 11.5 percent the previous year to 18.75 percent in June of the current year, in a sequence of eight successive rate hikes designed to combat inflation and withdraw excess liquidity from circulation.
The Central Bank of Nigeria's Sectoral Analysis of Deposit Money Banks' Credit revealed that the real estate sector secured a loan of N755 billion, while the construction industry managed even more remarkable credit facilities worth N1.51 trillion.
Further data from the CBN indicated that borrowing by real estate firms had increased by 44.4 percent, surging from N712 billion to N755 billion. Simultaneously, loans acquired by construction firms had risen from N1.19 trillion to N1.51 trillion within the same timeframe.
Breaking down the data on a monthly basis, N1.80 trillion was borrowed in December, followed by N1.78 trillion in January, N1.82 trillion in February, N1.84 trillion in March, N1.88 trillion in April, and N1.84 trillion in May.
The rise in the benchmark interest rate had its impact on the nation's economy, exacerbating its housing crisis and leading investors to adopt a wait-and-see approach as building prices continued to surge.