Besides credit challenges, building confidence in potential investors that their investment will be safe and yield desired dividend is also critical to stimulating interest and transactions in the real estate sector, analysts have said.
They argue that even if the issue of credit is settled such that a developer or investor can walk into the bank and accesses same, the same investor needs assurance that his investment will be safe, explaining that once there are cases of insecurity as Nigeria now has, the first to be affected and the last to recover is the real estate sector.
“Under a state of insecurity, people can still go into the business of importing and selling which cannot be done in real estate because of its long gestation period; where people don’t have any hope or source of income, they won’t like to get involved in real estate investment,” they note.
Charles Oludare, an investment analyst, insists that unless government addresses decisively the security situation in the country, “the economy as a whole is periled,” noting that real estate, the world over, is a strong indicator of the health or otherwise of an economy.
“Every hope of a positive turnaround in this sector, especially after the 2011 general elections and the banking sector reform, has been dashed; the sector has continued in its gradual recovery and even in some locations, it seems to be on downward trend,” he says.
This, he adds, does not augur well for the country’s economy because this sector is supposed to be the centre and engine of economic growth, providing employment, and making the country self-sustaining.
Bode Adediji, an estate surveyor and valuer, shares this view, hoping however that change would happen, as he notes that government was conscious of the situations which explains the focus and emphasis on the real sector of the economy.
He explains further that if an investor or even consumer knows that there is serious economic crisis in the country, he will minimise his spending, adding that when an average buyer or consumer in the market decides to limit his propensity to spend, demand will come down and production process is challenged.