Following the lockdown of Ogun, Lagos and federal capital territory (FCT) Abuja which are the major real estate hubs in Nigeria, investors in the country’s property industry have been forced to take either of two opposite positions.
The industry players have either committed to investing in the property market with the hope to attract higher earnings post Covid-19 or have adopted the wait-and-see attitude while pausing on their investments due to the uncertainty of the market, BusinesssDay gathered at the weekend.
Like other real estate industries globally, Nigeria’s property market is not immune to the heat from the coronavirus outbreak as the uncertainty created by the impact of the pandemic has left the sector in limbo.
To bend the curve of coronavirus in Nigeria, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days with effect from 11 pm on Monday, March 30, 2020. This restriction was also applied to Ogun State due to its proximity to Lagos.
With economic activities in Africa’s largest economy almost brought to a standstill amid coronavirus lockdown, real estate investors have taken the following positions:
Risk-averse investors
Gripped by fear of uncertainty in the property market, some real estate players have taken the position to hold on their investment in an attempt to avoid the relatively higher risk environment.
The rampaging virus has also restricted both real estate investors and property developers from property inspections amid lockdown and social distancing. As a result, many now depend solely on the internet for viewing the properties they would be putting in their funds post Covid-19.
“We are seeing a lot of saved properties in our online platform,” Dapo Eludire, COO, PropertyPro said.
According to Uzo Oshogwe, MD, Afriland Properties it is most unlikely that the real estate investors who are viewing and saving properties online will close on the transactions because “they can’t be paying millions for properties they haven’t seen in person.”
John Oamen, Co-Founder of LiveVend real estate explained that projects are now stalled due to the imposed limit on the number of workers allowed on a site at a particular time.
“Some real estate investors are holding back on investing in the market,” Oamen said.
High-risk investor
These set of investors are taking a position in Nigeria’s real estate market as they see the opportunity for a high return on their investment post-Covid-19.
“Investors can’t put their funds in the money market and they can’t take it out of the country due to currency devaluation, so they are taking a position because the real estate market is one of the best available investment options,” Modupe Anjous, CEO, Rydal Mews said.
According to Oamen, history has shown that negative situations such as the pandemic that has affected the real estate market open up opportunities.
“Certain transactions are still going on. Individuals are taking a position for the future, anticipating rises in certain places,” he said in a mail response to BusinessDay.
Meanwhile, with the increase in online search for real estate properties amid the lockdown, industry players are anticipating a rush in real estate services and transactions post Covid-19.
“There are people who want to make a decision now and sell when the pandemic is over,” Anjous said.
ENDURANCE OKAFOR
