Even in Tough Economic Times, Property Values Keeps Soaring

ESV Gold Ita

Tough economic times like what is being experienced in the Nigerian and other developing economies today calls for wise and informed investment decisions. And the only wise investment choice at the moment is investments in the real estate sector.

The Nigerian economic environment is becoming very turbulent, and characterized by high inflation, unstable exchange rate, inconsistency in government policies, and most recently a very challenging political environment as witnessed in the recent August, 2024 mass protest #EndBadGoveranace. Even in the midst of all these, property values keeping soaring higher. This opinion article x-rays some of the reasons for this development in the Nigerian and African real estate sector by extension.

In a recent data released by the African Export Import Bank (Afreximbank) in July, 2024, the Nigerian current population figure was put at approximately 223 million, and maintained its leading position as the most populous nation in Africa. Thus, the Nigherian rapidly growing population is driving the demand for housing, especially in cities like Lagos, Abuja, Port-Harcourt, Kano, Kaduna, Benin-City, just to mention a few. These cities have a highbrow living that leads to property values.

Even in the midst of the economic downturn, there are sectors and activities that are driving real time wealth into the purse of so many Nigerians, and most of these monies being made are channeled into real estate investment. This development has led to increase in real estate luxury living and high profile housing demands across Nigeria. In a place like Abuja, real estate activities are being driven by government activities.

Government quest to keep improving on infrastructure development in major Nigerian cities has led to massive increase in property values. Improved road networks to hitherto satellite towns in Nigerian cities have changed the status and values of properties in these new areas. Urban expansions activities are capturing farmlands into commercial and residential spaces, and thereby driving up property prices.
When it comes to investment decisions and analysis, it is a known fact that real estate is the only investment that has good hedge over inflation. This is what makes it a very popular investment decision in a time of inflation.

The appealing nature of real estate investment to both local and foreign real investors is another factor that is driving high prices in the real estate market space. The local and foreign capital inflow into the Nigerian and African real estate market is quite encouraging with ample multiplier effects on the economy.

Massive rural-urban migration to cities like Lagos and Abuja has led unimaginable housing demands and forcing prices higher and even beyond the reach of so many Nigerians.

In conclusion, the huge confidence reposed on real estate investment as a safe wealth that keeps property values stable, even in inflationary periods is another key factor that keeps property values on the soaring sides. This factor will continue to be one of the major reasons why people will continue to invest in real estate.
ESV Ita Gold is Calabar-based Estate Surveyor and Valuer