The goal of real estate investing is to put your money to work, what we simply refer to as sending your money on an errand today so that you have more in the future and pay for your lifestyle and avoid going bankrupt. Make no mistakes, simple doesn’t necessarily mean easy. The market analysis for Lagos state shows one of the highest property values in Nigeria and a good source of cash flow. The Lagos property market especially the mid-market segment remained buoyant when property prices in states across the country took a haircut from the recent economic recession.
With the volatility experienced in 2022 and pre-election year panic, potential investors refrain from investing in the real estate market during upcoming elections as they sit on the fence anticipating major changes in government policies and compounding drag in the macroeconomic climate, particularly growing inflation that has shot up construction cost across all indices.
With stiffening liquidity, leaving real estate developers short of cash, but for the savvy investors this is typically the best time because the lack of liquidity drives property developers to sell below market value.
Both developers and investors keep a watchful eye on the economy which is very unsettled by a lot of uncertainties and recession fear, and this is taking a toll on home or property shoppers.
It is also anticipated that some properties are sold for less than their prices to raise funding for electoral campaigns and in today’s era of ‘Japa’- Smart investors capitalise on the rush to buy -out distress sales.
Reports on inflation and interest rates rising, mortgage rates still on 2 figures, increase in construction costs from 70 – 200% minimum, growing population, decline in purchasing power and affordability even the mid-income and low-income houses are fast becoming unaccessible for average citizens.
The sector is not immune to the effects of COVID-19, rising living costs, and workplace disruption all of which affect property prices from commercial properties to office as they emptied out and forced companies to downsize and give up spaces and then we could see tremendous and positive growth potential from commercial to residential.
The market is filled with investors apathy as investors are worried on the possibilities of getting their returns back out.
However, Lagos continues to attract investors because of its dense population mostly upwardly mobile individuals, rising urbanization, and government initiatives to transform the city into a megacity. Due to the market’s potential for a secure and higher return, some are eager to invest in Lagos real estate.
Buying a house or property in any economic situation is a personal decision as they represent one of the most crucial purchases we make in a lifetime. Its best to find the best-suited property to meet the need. Trying to wait to see the outcome of things might not be the best strategy, these buyers waiting at the side-lines today might get disappointed.
There is a disconnect between sellers and buyers now, buyers want lower prices as the developers struggle to stay afloat. Instead of watching and waiting for lower prices, it is safe to buy now based on the budget and needs.
Cash is king and money top of mind for everyone right now the strength of this is predicted that real estate will have a more positive outlook post-elections as increased economic activities will be visible and in turn increase real estate demand.
