For home buyers and patient investors with long term view of the market, the time is now, to move cash to the property market. Investigation reveals that the market has, in recent time, received huge supply from sellers, mostly politicians, in need of cash to run for elections in 2019 and other things.
findings in the Abuja market show that, in a desperate bid to fund political campaigns and other activities leading to the elections, politicians have begun to offer houses, plots of land, etc at give-away prices. In some instances, the reduction in prices of some of these properties is as high as 30 percent.
Apart from the urgent need by political actors to fund their elections, it was also discovered that the uncertainty that hangs in the air, in the build-up to the elections, are also contributing to what now looks like an auction-drive in the market as some investors are also off-loading to raise cash.
“There is, indeed, a sharp drop in property prices”, Ugochukwu Chime, president of Real Estate Developers Association of Nigeria (REDAN), confirmed to BusinessDay. He explained that the development was also caused by the rising quest to invest in more mobile investment outlets in order to have liquidity access, more so with the economic downturn.
“A lot of people are off-loading their properties to enable them to finance the elections, or for other reasons. Concerning the election, you never know what anybody wants to do until he wins election. In the past, we had promises that never got actualized, “ he added.
Chime explained that those who have preference for mobile investments do so because they see that the economy is looking South and this is one of the challenges in the economy. He noted that a lot of people were abandoning property market for other more mobile investment outlets.
“That is what is to be seen going forward and when that occurs, it becomes a bias market and because we have a lot of products in the market looking for buyers, the buyers have a lot of choice to make and can therefore determine some of the things including prices and that is how it is going to be for some times till after elections”, he said.
The air of uncertainty in the polity is another factor adding to the slowdown in the market. People are afraid, especially because of comments by some of the political actors, giving the impression that there is going to be a problem.
Chime reasoned that this also makes people withhold their investment till they are sure that there is a little bit of stability in the socio-political environment . It is only then that people can decide to invest. Right now, some people are thinking of investing in Ghana, Dubai and other parts of the world.
“These investors may go into agriculture or some other service industry which have higher return on investment and which can allow them to move away with their cash as an escape from the challenges in the economy, “ he said.
As a result of these developments, the market has seen significant drop in property prices. Alomaga Olajide, an estate surveyor and valuer, affirms, citing instance of a duplex valued at N250 million now offered for between N200 million and N150 million.
“As we speak, we have a huge supply of properties in the market and whenever it comes this way, because of the need for cash, it comes cheaper. Ordinarily , you can’t see a duplex valued at N250 million now going for N150million or N200million. This is simply because the seller has need for cash to do something tangible
“If he or she does not bring it down like that, nobody will be ready to pay. So this is just to attract buyers so as to get the cash needed for other things. Property market during election period is cheap and there is always a huge supply of property”, Olajide revealed.
According to him, politicians are all out to get cash to fund their campaign to be able to promote their political ambition and career. So, majority of them, because there is no cash anywhere else, have to work very hard.
He noted that many politicians have invested in the past and they have quite a number of properties here and there and often time we experience a very huge supply of property in the market and high number of people are ready to sell their property to raise cash to pursue other things.
“Whoever wants to invest or has the mind to invest in real estate should do it now because you will get property at a cheaper rate . Once the demand is low and supply is huge, price will definitely fall. That is what we are experiencing at the moment, “ Olajide observed.