[dropcap]T[/dropcap]he Nigerian real estate market is not immune to the effect of the coronavirus outbreak as industry investors adopted a wait-and-see attitude amid uncertainty in the sector.
Chidi Etoniru, managing partner at Joe Etoniru and Associates, a real estate development company, said. “We had a client who wanted to buy a property, and we had already finalised everything but due to the virus outbreak and currency uncertainty, he said he would want to wait for the next 90 days to watch the market,”
Nigeria’s first which was a italian man coming from Milan, italy, carried the virus through the airport undetected as the Nigerian goverment wasn’t prepared for the coming danger.
Before the pandemic, the Nigerian government had been grappling with weak recovery from the 2014 oil price shock, with GDP growth tapering around 2.3 percent in 2019. Considering that Nigeria and many other African countries have economies whose performance have strong ties to commodities, such as oil, discussions on how the virus will affect Nigeria erupted from every angle of the country.
Their apprehension also arose that several sectors have taken a heavy beating, except real estate. The Coronavirus pandemic took some group of buyers out of the market. One, are those adopting a wait-and-see approach or those simply unable to buy due to reduced income.
The sectors & value chain of the Nigerian real estate market that got hit the most by the coronavirus pandemic
The effect on real estate businesses that are largely dependent on international tourism like hotels got hit the hardest in the Nigerian real estate market.
The major driver of commercial real estate in the Nigerian real estate market is Oil. Nigerian commercial realestate is largely dependant on effect Oil prices.
According to industry players, a lower crude price means Nigeria’s office market is at higher risk of low performance.
The largest corporate occupier and demand driver for the luxury residential property are from the oil industry.
Building materials & Value Chain
Also the major drivers of the Nigerian real estate market starting from the suppliers of raw materials like sand, gravel, cement, nails, water, block, wood, plywood, steel rods to middlemen like agents, bricklayers, sand suppliers from the slums, food vendors, carpenters etc. This people felt the ruins of the COVID-19 pandemic to their businesses and various occupations.