Investment analysts and close watchers of the Nigerian property market say it is becoming increasingly clear that as the year draws to an end, new investment decisions and the up-coming general elections scheduled for early next year are changing market outlook with possible negative impact on asset prices.
So far, however, asking prices for high end properties are still high, seemingly defying market watchers’ predictions of a glut resulting from choice properties coming into the market with possible lower prices.
“The market is wearing what could best be described as a ‘screen saver’ outlook”, Olumide Olutimeyin, managing director, Axora Home Limited, said, explaining that while asking prices might seem exorbitant, sellers are quite willing to bring down prices once buyers show strong intent to buy.
BusinessDay investigations reveals that prices in the market remain quite high with a plot of land measuring 6,794 square metres in Banana Island selling N1.9 billion; 3,600 square metres of land on Glover Road, Ikoyi selling for N900 million; 1,315Sqm of land on Alexander Avenue, Ikoyi sells for N400 million, while a seven-bedroom mansion in Lekki phase 1 is going for N600 million.
“It is quite difficult getting good asking prices these days,” Olutimayin noted, pointing out that since buyers owned the purchasing power, the onus lies on them to determine the ‘right’ prices if they could wield their bargaining skills.
He however, acknowledged that some property vendors have contributed to raising property prices with the aim of dismissing any idea a saturated market.
“There has been a sudden spike in the number of new plots coming into the market for sale as the elections are fast approaching,” Rotimi Akinlose, managing director, Residential Auction Company (RAC), a real estate research firm, confirmed to BusinessDay in response to questions on possible impacts of the election on the property market.
Akinlose maintained that though he is unaware of the personalities behind the new plots, there is a clear indication that some politicians or people within the political circle are bracing up for next year elections and ready to off-load their assets to raise needed funds.
Okechukwu Iwuagwu, a director at O-macconi, a real estate firm, noted that as the year winds up, the thirst for liquidity will eventually compel investors to offload some of their assets either to finance elections, leisure trips or re-invest in other sectors in the new year.
This, he said, could increase activity in a market he believes is yet to live up to expectation in a pre-election year when compared to succeeding pre-election years, saying, “though the market seems to be dragging currently, we expect some activity as the year winds up when investors would re-evaluate their assets and will be seeking to diversify to other buoyant sectors of the economy”.
Expressing hope in the market, Obi Ejimofo, managing director, Lamudi, an online property marketplace, said as the election approached, the market would ultimately become buoyant as need for funds soar.
Asked if he had noticed any increase in the number property coming into the market through his firm’s online space, Ejimofo responded in the negative, explaining that high profile deals were usually kept away from public domain.
ODINAKA MBONU
