What is the Future of Real Estate in Nigeria?
Over the years, the Real Estate sector in Nigeria has proven to be a bedrock of the economy that cannot be shaken. Despite the Ups and Downs and the economic imbalance, real estate has been one of the most consistent sectors in the economy. However, in the year 2016, the future of what seems to be the best in Nigeria started dwindling. Nigeria is faced with the questions of the lucrativeness of the sector.
Thus, what seem to be a shining star, that could blind any dull beggar is now a questionable dark lantern in a small dark room. We are at a point where luxury apartments cost 20% lower than it used to be. At this point, everybody is selling and dumping the real estate sector as an unprofitable hub. This has definitely led to the questioning of this once very profitable enterprise. Everyone is asking, What is the future of the Nigerian Real Estate sector?
Due to the current recession, the real estate industry has suffered great strokes, especially the luxury real estate. As we know, housing is one of the basic human needs, so no matter the cost of renting an apartment or buying a property, people will still live in a house. The effect of this is that individuals who lived in bigger apartments may evacuate the building for smaller ones.
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Gbenga Olaniyan the CEO of Estate Links, one of the leading businessmen in the Nigerian real estate sector answers this in an interview with Dupe Awobajo, below are some excerpts from the interview:
Apart from Real Estate Which Other Businesses are you involved in?
I have invested in a lot of business. I have come to realise that real Estate is all that I should invest in. I have tried a couple of things many years past which didn’t work out. So I have decided to stick to real Estate 100%.
What’s Your Advice For those who intend to Invest in Real Estate During the Recession?
Now, I am going to use this as an example, I got into the real estate in 1988. We had the first recession at the end of Babangida days in 1989/1991. At this point, so many people were selling properties, but that was the time that discerning investors started buying. Real Estate has actually out dawn the drop of the value of the Naira. For instance, a wing of a duplex in Dolphin was One million naira in 1991. One Million naira which is 50,000 pounds. Today, Dolphin is 90 million. And that is about 170,000 pounds. This shows that real Estate is where to keep your money as a store of value.
Whatever end of the market you want to invest in there are properties for you. For instance, lands right now in the new EPZ (Export Processing Zone), Dangote is going to move about well over 20,000 to 50,000 people towards that zone.
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Those people have to live somewhere. Right now the plot of land with documentation will cost about two million Naira. Some people
are investing about 1 billion Naira in it. It is when everybody is selling that you should be buying. Everyone should look at the “imagine” market in real estate. The new Airport and seaport will be there. Ikoyi and VI are currently at the lowest that they will ever be. Right now they are at the lowest that they can be. I have always recommended that people should look at the “imagine market” in real estate.
What is the Future of Real Estate in Nigeria?
Right now the luxury real estate in Nigeria is suffering a major battering. Right now the residential real estate at the high end, but it will bounce back together with the economy. The fact that the supply has gone down has also helped. In my own projection, I see the market bounce back in the next three years. It will bounce back and you will see developers starting to scramble once again.
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One thing worthy of note is that this is not something that only happened in Nigeria, it happened worldwide. At a point, the UK went through this. In Canary Wharf where we have the best high rise properties concentrated in one spot. Some owners were talking to major international companies to move into their properties and rent free for a year just to pay the service charge. I don’t see that happening here, we are even better off.
This interview shows that the future of real estate in Nigeria is very good and in fact, investing in real estate is one of the best business in Nigeria right now, even though it seems illogical. In the long run, the “Imagine Market” wins.
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