Tackling Economic Headwinds through Real Estate Investments
ESV Lucky Blessing Emi
The Stable cash flow of real estate investments in all its entire value chain makes it a compelling investment destination for investors in the real estate ecosystem. In the last decades, major urban centers across Nigeria like Lagos, Ibadan, Abuja, Kano, Port-Harcourt, Kaduna, Awka, Enugu, Benin, Aba, Abeokuta, Asaba, Warri, and Jos have grown exponentially. Lagos in particular is estimated to be one of the world’s fastest growing cities, and has been described by real estate industry watchers as an investors’ haven.
Investments in the real estate space will always lead to a stable cash flow no matter the climes where the investment is domiciled. Despite macroeconomic headwinds, the pandemic, and a variety of challenges within the real estate ecosystem, the sector’s outlook remains overwhelmingly optimistic as operators and stakeholders continue to rethink their approaches and plans. Global investment in the real estate sector has been on a steady increase.
In the midst of worsening domestic and global economic challenges, real estate remains the most stable investment opportunities for individuals, families, corporate, and institutional investors. Mortgage financial institutions have over the years argued that the best way to retain wealth is to convert it to real estate.
As inflation and devaluation rear their ugly heads, it makes both appealing and compelling sense for people to look for safe havens to guard their savings, and protect their future.
Financial institutions awash with liquidity and developers sitting on large tracts of land, houses and stores have shown a willingness to revise payment terms to suit the prevailing economic conditions for buyers that can demonstrate sufficient interest and capacity.
The availability of creative financing schemes for real estate buyers in a dipping economy could prove to be the right tonic for weathering the coming current challenges and impending storms.
A rising population and improving infrastructure provide guarantees that the value of property will continue to rise in Nigeria, and across the World.
Another advantage is that unlike competing investment destinations such as equity investing on the stock markets, which are very prone to feverish swings based on sentiment, the fundamentals of property will remain sound and appealing for decades to come.
More than ever, the industry can take advantage of the current opportunity to reimagine how things work and chart a new course that sustains growth, promotes inclusivity, and embraces technology to improve performance and provide appropriate solutions for 21st-century Nigeria’s residential and commercial needs.
As mentioned above, one factor that will drive the real estate ecosystem is technology. With the advent of social media platforms, connecting prospects and clients to available real estate products has been most seamless. In advanced economies of the World, technology is playing a pivotal role, and redefining real estate investments globally.
Whatever argument one may put in, investments in real estate remains the most timely and proven economic solution of tackling economic headwinds. In the case of Nigeria, where investment in this sector is on the increase, challenges like lack of capital have been a drawback for both private and institutional investors in this regard as real estate investment is capital intensive.
The lucrative nature of real estate investment has over the years attracted illicit funds to the sector. In Nigeria today, most real estate developers are on the watch list of the anti-graft agency – The Economic and Financial Crimes Commission (EFCC). This development arose when so many stolen government funds were traced to the real estate. But whatever way you may look at it, investment in real estate will remain attractive and the best way to invest.
ESV Lucky Blessing Emi, is a registered Estate Surveyor and Valuer. He is the Principal Consultant of Lucky Emi Consulting, a leading Nigerian firm of estate surveyors and Valuers.
