Nigeria’s real estate sector has shown resilience as its growth accelerated by 4.44 percent in the first quarter of this year amid rising building material costs and headwinds in the economy reflected in galloping inflation, high-interest rate, and volatile exchange rate.
The growth shows a significant increase when compared with the 2.26 percent it recorded in the last quarter of 2021 and 1.77 percent in Q1 2021.
This means that the sector still holds prospects for investors, but that is mostly for those of them with patient capital and long-term view of the market. It also means that investor confidence in the sector remains strong despite what experts describe as fragile recovery of the economy.
Experts have attributed the growth in the sector to increased activities, which, according to them, show investors have ignored the economy and high material costs to carry on with investment and developments.
In his monthly breakfast session at the Lagos Business School, Bismarck Rewane, CEO of Financial Derivatives Company, said spending on real estate assets would spike in the run-up to the general elections, describing the sector as a beneficiary of money laundering.
The inflation currently ravaging Nigeria, affecting all economic sectors of the nation, including the Nigerian real estate sector, is no new news. With this, experts insist that there is no better time to invest in real estate than now.
Experts explained that every investment in the sector can only appreciate, as it cannot depreciate.
They insist that though inflation is currently ravaging the economy, the money invested in the sector will not depreciate but appreciate.
Ayobami Kareem, Chief Executive Officer of Whiterose Properties, said, “The Inflation ‘cancer’ currently ravaging the country is, no doubt, negatively affecting all the economic sectors of the country, the real estate sector inclusive.
“However, there is still no better time to invest in real estate than now. This is because any investment in real estate can only appreciate, as real estate never depreciates
“Hence, inflation can actually be a blessing in disguise for real estate investors due to the speedy rate of appreciation of real estate this period, thereby guaranteeing a bountiful return on investment for investors within the shortest possible time.”_
Chief Executive Officer, Octo5 Holdings Limited, Jide Odusolu, explained that investors can take advantage of foreign exchange fluctuations to invest with a long-term focus on assets around the Lagos and Abuja axes.
He said, “We believe that this is the time to invest, especially in Lagos and Abuja markets. For those with access to FX earnings, we believe that it is a bet worth considering for the long-term
The volatility in the foreign exchange regime means that with smaller dollar sums, you can buy significant assets below value, especially in the middle market sector with massive unmet demand.
“Real estate investment remains good protection against the high inflation rate and has proven to be resistant to erosion of value. Our philosophy is summed up by the conviction that a smart _investment made at the right time will always appreciate in value.
“The realities of the Naira devaluation on everyday Nigerians continue to bite. However, many households and businesses have seen a huge spike in the costs of goods and services, which has taken a toll on disposable income which many Nigerians can save or invest.
“We believe that this is the time to invest, especially in Lagos and Abuja markets. For those with access to FX earnings, we believe that it is a bet worth considering for the long-term.”