•Real Estate ExpertsExpress Fears
Right now in the Real Estate sector, there is palpable panic as to what is most likely to happen to that sector this year. This is as a result of the forthcoming presidential elections next month. As you read this, many players have narrowed the presidential elections to a straight fight between President Muhammadu Buhari, the APC presidential candidate and Alhaji Atiku Abubakar of the PDP. It is generally believed that whoever emerges between the 2 will be crucial to the shape of real estate business this year.
As 2019 unfolds, many real estate players have begun to air their views on what they think is most likely going to happen to their sector. Those who spoke to City People recently include the GMD of Suru Group, Mr. Edward Akinlade the GMD of Adron Homes, Akile Oba EmmanuelKing, Otunba Yemi Lawal, the GMD/CEO of Seagle Properties; Mr. Rogba Orimalade, the Chairman of Lagos NIESV and Mr. Bamidele Onalaja, the MD of Revolution Plus.
According to the GMD of Suru Group, what will determine the shape of Real Estate business in 2019 is the outcome of the presidential election. It is going to be a straight fight between Pres. Buhari and Alhaji Abubakar Atiku. If Buhari wins there might not be any fundamental change in the real estate market from what we have now. People are keeping their money. They are not ready to spend because they are afraid of EFCC asking how they made their billions. But if Atiku wins money will flow in. People will spend and the economy will pick up. Atiku understands the language of business. Don’t forget that a lot of the money that fuelled the real estate sector under ex-President Jonathan were funds made through all sorts of deals. Many used real estate development to lander money, but once President Buhari came into office, they stopped spending so as to avoid all eyes being on them. So, many people are watching political developments to know what to do. So in the first quarter of this year there is not going to be much activity happening in that sector.
Pastor Jagun is a respected real estate guru. He runs a flourishing real estate practice in Lagos and he was once the Chairman of Lagos NIESV. How does he see the Real Estate Sector faring in 2019? “The forthcoming election will affect the Real Estate sector,” he explains. “Its an election year, so foreign investors will be cautions in supporting finance in Nigeria, especially with the way our politicians are heating up the polity. Those who have funds here will be looking for how to take off their investment. Locally, we will see some politicians put up properties up for sale to fund their ambition. That create a Buyers market were the buyers will dictate and influence market price to their favour. If all things work out well for Nigeria, we would expect new political players trying to buy apartment to suit their new status. What I am saying in essence is that in the early part of the year there will be more properties up for sale, while in the later part. We would see more activities on the Buying side.
Mr. Bamidele Onalaja is the MD/CEO of RevolutionPlus Property Company. He is one of the big players in the real estate sector. How does he see the Real Estate faring in 2019? “Well, I think people still have the desire to buy property this year, as usual, but the problem has to do with their ability to buy. Do they have the wherewithal. This year 2019, I see the Real Estate market booming more because more people will want to buy houses and land this year, but the spending power will not be that high.
How does Otunba Yemi Lawal, the MD/CEO of Seagle Properties see the real estate sector faring in 2019? He sees the February elections as a problem. In the just concluded year, 2018, the economic situation affected the real estate business as there was no flow of cash. In 2019, the elections may slow things down in the 1st Quarter of the year. The eletion of 2019 is the main determinant, unless there is a change in government which is very right, the situation could be worse. People are keeping their funds to meet their daily bread. One should tread with caution, until after the election. Lets wait for the 2nd quarter.”
What does Rogba Orimalade, the current Chairman of Lagos NIESV feel about the Estate sector in 2019. “It might be slow a bit in early 2019, but things will get better later on in the year. Last year, the real estate business was slow. People just did all they could to stay afoat, to remain in business. It can only get better this year. It is not so much about who wins the presidential election next month. Irrespective of who comes to government, business will be good. We have come out of the depression we encountered over a year ago. We are coming up in 2019. Let’s look beyond the 1st Quarter which I believe will be extremely slow. The outcome fo the election is unpredictable. Now, there is restriction of funds. People perceive Atiku to be generally pro-business and Buhari to be a bit conservative business wise.
But the good thing is that the market has woken up. The growth rate has gone up. Whatever party wins, there will be steady growth and development especially after the 1st Quarter. Before the elections people will be cautions to spend money. Money will be held down till after the elections.
Abuja based real estate player, Victor Ayeye is also quite optimistic. Victor Ayeye’s is a big name in the real estate sector in Abuja. He is the founding Partner and Chief Executive Officer of Ayeye & Co, a leading firm of Estate Surveyors and Valuers with about 20 years experience in the Real Estate sector.
Ayeye is the immediate past Honourary National Secretary, a former Hon. National Publicity Secretary and Current Council Member of the Nigerian Institution of Estate Surveyors and Valuers (NIESV). He is also a member of various Real Estate related professional bodies.
A few months back, City People asked him for his assessment of the Abuja real estate market for the past few years, he explained that, the Abuja real estate market had suffered serious setback in the past few years. You will agree with me that, the real estate Market doesn’t operate in isolation. It operates in the Economy. The Economy has been in recession and during recession, issue of investment is not a priority. Residents struggle to even eat and cloth themselves which is more important than housing. According to Maslow hierarchy of needs, after food and shelter comes housing. Properties are not changing hand in the market, people are even afraid to buy, investors are scared, generally the sector has been in a coma. Tenants even find it difficult to pay rent, Landlords couldn’t get rent and as such can’t pay their children school fees.
The government claim of fight against corruption grounded the sector and worst still, there is no access to finance from Financial Institutions for those who even need bank loans and those who are lucky to get the loans have to pay through their nose interest rate as much as 25%. Access to Land itself is also a major problem. The FCT Minister has been very slow in the issuance of Certificate of Occupancy and for those who even need consent, the cost is too high and therefore so many properties doesn’t have Title and as such wealth cannot be created.
The state of insecurity in the country, has also caused a lot of setback in the property market. Killings everywhere from Boko Haram to Herdsmen etc. foreign investors have been scared and all this have effect on the Real Estate Sector.
In the area of Letting, so many properties are vacant and To Let and has remained so for years because of lack of funds to rent. People now are moving very far away from the city because of affordability and there are no infrastructure to support this.
What can be done to reawaken the Abuja Real Estate Market? The government should pay serious attention to the issue of Housing. Secondly, access to land should be made easier to attract investors who will invest in building, once the sector is active, unemployment in the country will be drastically reduced, if you want to build a 3 bedroom bungalow for instance, you will provide employment for at least 50 people. From the Architect, to Estate and project Manager, to Bricklayer, to Plumber, Labourers, food seller etc and this will reduce crime rate. Thirdly, Government as they have just started should embark on massive infrastructural development. The Rail should work across the nation, good roads should not be in scarce supply, electricity should be common and general, portable water supply should be made available to all. Finally, there should be access to finance. Presently, Nigerians do not have access to development finance, a rate of 25% is grossly excessive loan for housing should be single digit to encourage investment in housing.