Though developers generally admit that these, indeed, are very challenging time for their industry, many of them are not frightened because they expect to see a lot of positives for the industry when the world wriggles its way out of the Covid-19 crisis.
These developers admit too that it has not been business as usual for every sector of the economy as each sector is feeling the devastating impact of the pandemic. But they are optimistic that as soon as demand for oil returns, business in general and real estate in particular will be back on track.
Kazeem Bello-Osagie, the chief executive officer of Hampton-Row Real Estate, is one these developers. He is very optimistic that the Nigerian economy, particularly the real estate sector, will bounce back in the post-coronavirus pandemic era.
Bello-Osagie, in an interview in Lagos, highlighted the effects of the virus on the world’s economy, noting that the major slide suffered by Nigeria has been occasioned by the drop in global oil prices.
“As you know, we are an oil dependent economy and the recent unprecedented crash in the oil prices in the global market indicates that government will slow down on their spending, which will have a snowballing effect on the real estate market, spiraling down to property developers,” he noted.
Continuing, he pointed out, “another catalyst in the past for the real estate growth in Nigeria has been funds from the Diaspora and most of these developed economies that warehouse these funds are already in recession, hence we can foresee the ripple effect it would have on Nigerians wanting to repatriate funds to invest in the real estate market at home.”
Back home, he said, “for us at Hampton Row, it has directly affected us as we have had to suspend construction in line with the social distancing and lockdown order. It has also slowed down sales as the mindset of potential subscribers is that cash is king now, especially as we are dealing with a virus that the world still does not understand, making it difficult for a potential subscriber to plan and forecast.”
“In the post-COVID-19 era, the perception and the desire to own a home will change, as a house is not only an investment but a shelter in time of crisis. The worst case scenario is that cost of houses will drop , but sooner or later it will bounce back when the economy stabilizes.
“Because this is somewhat a Force Majeure and an unforeseen crisis, a lot of property developers may have to readjust their prices to an invincible market , thus creating a glut in the sector, especially as there will be distress sale of properties. I am, however, positive there will be a major bounce back for the sector,” he reasoned.
The 44-year old realtor came into full-time real estate business in 2014 when he established Hampton-Row Real Estate. He had been actively involved in the real estate sector for over 15 years in the informal sector while he still ran QUO Courier & Logistics before realizing there was a major gap in the housing industry in Nigeria, in the areas of finishing and transferring real value to the end users.