Despite the seeming lull in the construction sector, particularly, housing industry, experts are of the opinion that this time of deep recession is more appropriate to invest in housing delivery.
Though, like two-edged sword, industry watchers are of the view that with weak currency competing with strong foreign ones, Nigerians in the Diaspora would do themselves a lot of good if they use the current situation to put their monies in the Nigeria’s real estate sector.
Nigerian Tribune’s investigations revealed that Nigeria’s economy still in trouble, many of the real estate projects embarked upon are either partially ongoing, or completely abandoned, as most players due to recession, have refused to continue their project, or embark on new ones.
“But the situation is like two-edged sword. The scenario painted above, though, thoroughly affected Nigerians at home, but to those in the Diaspora, the current situation favours them, judging by the exchange rate by which $1 is equivalent of N500! The implication is that with $3000-$4000, one will get a good 3-bedroom apartment in the highbrow Lekki or even, in Mowe axis of Lagos State, observed,” Vincent Martins, Managing Director/CEO, Phalanx REALconsul told the Nigerian Tribune in an interview.
According to Martins, certain factors that include the exchange rate, lean purchasing power of many Nigerians, weak currency, among others, posed a threat to any possibility of real estate recovery very soon.
“Facts on ground are enough to show that real estate sector is in trouble. There is no indication of possible recovery this year and such feat is even doubtful to achieve not until possibly, middle of next year, all things possible,” he added.
Although, he admitted that many houses seeking for buyers are not within the reach of average Nigerians at home, he said “in many estates, there are hundreds of housing units constructed by private developers and government, with various house types that meet the needs of prospective home owners, but yet to be occupied as a result of the recession.”
However, he was quick to add that investors who know their onions are not deterred, knowing full well that the situation, like anything on earth is subject to change.
Speaking also, the Vice President, Nigerian Institute of Builders (NIOB), Kunle Awobodu, said although the current situation looks dicey, there’s hope to those who are bold and are good risk takers.
“Just as I said last time, quantity of housing delivery is determined by the cost of these inputs, the price of the existing stock of houses, and the technology of production. However, this is time to invest, especially, for those Nigerians abroad that are gainfully employed and those that have access to loan at a low rate interest of a single digit. It’s time for them to come and invest in real estate, because it would yield massive profit in future,” he said.
Similarly, another Property Consultant, Clement Osuji, while bemoaning what the recession is doing to the sector, quickly assured that hope of economic recovery is in corner.
To him, apart from government projects, not many housing projects by the private developers are currently ongoing as many construction sites are either totally deserted or with partial activities going on.
Osuji observed that construction activities provides a lot of opportunities, such as employment, high circulation of money to the economy, while its negative effect influence job loss and lack of money in circulation.
“In essence, the situation is not a win-win, or loss-loss, but rather, requires pragmatic approach. For instance, Lagos is still witnessing activities in the housing sector, but what one cannot vouch for is the quality of housing being constructed, and that may be partly responsible for the incidences of building collapse,” he said.
But studies show that despite recession, people are still investing in housing sector, especially, the would-be home owners. For instance, statistics from Lagos State Ministry for Housing, revealed that in the newly introduced “Rent-to-Own” sector, which attracts middle and low income earners, “over 70 per cent of the available units have been subscribed by the prospective home owners.