For most potential real estate investors (both local and foreign) there has been a lot of questions lately bothering on the state of things on the Nigerian real estate scene. Well, for the benefit of those who don’t know what is going on, below are a list of the major issues afflicting the sector at the moment:
1.) The dwindling crude oil prices
2.) The recent economic downturn as a result of the above
3.) Serious reduction in the level of experts in the country (especially in the Oil and Gas Sector)
4.) Reduction in foreign direct investment in the country
5.) The Nigerian Stock Market crash
6.) Recent anti-corruption activities of the Nigerian Government.
Of course there are more issues, but the above listed are the major issues (particularly prime real estate) this sector is contending with at the moment.
Whether we like it or not, Crude Oil still remains Nigeria’s main source of income and although the government of the day is making frantic efforts to create alternatives, the fact remains that we are still dependent on the black gold for our survival and the players in the Oil and Gas sector remains the heavy spenders in the economy. So, until they start doing well again, we may be in this mess for a while.
The power sector would have been another major source of hope for the real estate sector but at the moment, they are plagued with a bunch of headaches I doubt even they fully understand. So, our hope goes back to Oil.
About a month ago, I presented an off plan proposal to a client about an audacious property a developer was working on directly on Bourdillon road, Ikoyi, Lagos and although the client could afford it, his major concern was about the economic state of the nation, the fact that there are very little foreign workers in the country (which has impacted on the absorption rate of apartments for lease on the Island) and of course, his return on investment vis a vis his payback period.
I know it looks really gloomy at the moment, but these problems will not last forever, sooner than later, things are going to change for the better (especially with Oil and foreign direct investment in the nation). I have a feeling that’s what the few courageous developers who keep building despite the challenges believe as well. They have taken a position and when things change, they’ll be the first to benefit from the positive change.
As for you, the potential investor, please note that when things start changing, it will be at a very fast pace. So, my advice to you is to be prepared. If you don’t have enough faith in the industry to invest now, the least you can do is get your cash ready or lose out on the opportunities coming at the end of these current ordeals.
I am so convinced that we’re at a bend right now and at the turn of the corner, we’ll be faced with some new sectors that will power economic growth in the nation and most likely even edge out crude oil as the number one source for our country. This also implies that there will definitely be some very young and new billionaires rising from all these. I’m doing all I can to get ready; I hope you are as well.