As the Coronavirus pandemic (Covid-19) ravages the world with its impact on economy and wellbeing of individual households, experts in real estate are seeing declining liquidity and prioritization of consumption as factors that might inform rethinking new ways around doing things in the industry.
They believe that this period present a huge challenge to both consumers and investors in real estate, and therefore offer another opportunity for providers of housing, estate properties to think outside the box and come up with strategies to not only sustain available consumers but provide value to make investors look towards the industry.
Panelists at the talk include Kola Ashiru-Balogun, managing director, Mixta Africa Plc; Ahmed Musa Dangiwa, managing/CEO, Federal Mortgage Bank of Nigeria; Ude Okonjo, chief executive officer/VC Fine and Country West Africa; Temitayo Oshikoya, managing principal, Nextnomics Advisory; Chinua Azubuike, managing director, CBRE Excellerate and Chukwunonso Onny-Ezeh, chief executive officer, Asset-2-Sell Properties Limited.
Kola Ashiru-Balogun, who was the moderator of the talk provided background on how Covid-19 is impacting the economy including growing risk of sentiments globally, weak economic outlook, lower crude oil prices, which Nigeria is currently experiencing, and concerns of further currency devaluation.
He noted that these have resulted to a slowdown in investment (both government and private) hinging it on anticipated strain on federal government receipts and consumer income.
Oshikoya stated that the situation provides opportunities in the residential property area, particularly for investors who want to take advantage of long term opportunities.
According to him, pension funds and equity investors will find a great future in residential real estate as affordable housing will continue to be in high demand post Covid-19.
Looking at the opportunities in both residential and commercial properties, Oshikoya said while demand for real estate at the moment might reduce as households and individual are concerned on meeting basic needs, healthcare, job security companies will be concerned with savings cost, contract space, and conventional ways of doing the job, may be from home.
Dangiwa, an architect who spoke on efforts of government to increase access to affordable housing post COVID-19, said efforts are on to ensure the inclusion of the informal sector affordable housing schemes in the country using their banks BVN.
According to him, efforts are also on to open up Diaspora mortgage market, stating that documentations for this was being worked out and will be presented to the minister soon for further development. In addition, he discussed the importance of exploring technology to review the current mortgage application process
Chinua Azubuike, on his own discussed on how critical it is for the government to restart the economy with policy response as key in going through the COVID-19 cycle and launching to recovery. “We will see supply outstrip demand, and in the short and medium term, this will impact consumers, he said.
Udo Okonjo of Fine and Country who was upbeat on opportunities during and post Covid-19 said players should think outside the box, expand the market, and bring in Diaspora opportunistic investors increase liquidity in the sector.
Udo Okonjo said players in the industry must digitalize their product offerings to provide convenience, varieties and consumer engagement in the new world.
She noted that, there will be price adjustment to reflect the psychological and financial impact of the situation on investors and consumers, but the opportunities are there as there will always be long term investors. So, our responsibility is to create value that will be above inflation in the near future.
The panelist also discussed on strategies on incentives, price cut, rebates, tax holidays to assist investors, stakeholders, private and corporate buyers in the short-run.
Kola Ashiru- Balogun concluded by saying ‘At Mixta, we believe that housing is the bedrock of the economy, it presents an opportunity for individuals to build their own balance sheet. The more people we can get on the property ladder, the better it is for the economy.
Download the presentation: Making Informed Decisions in the COVID-19 Era - A Real Estate Perspective