Naira/Dollar Impasse Slows Down Property Market- Lamudi MD

Mr. Ejimofo Obi, managing director, Lamudi.com (Nigeria), the leading global online real estate marketplace, has decried the impact of foreign exchange fluctuations in the Nigeria and other emerging markets.

According to Obi, who spoke to Nigeria CommunicationsWeek at a recent Fireside Chat organized by AIG startups in collaboration with Information Technology Developers Entrepreneurship Accelerator (iDEA) hub in Yaba, real estate and property market in Nigeria has been hugely affected by the currency impasse since October last year.

He added that the market might be experiencing a decline in investors’ patronage since then, which is a clear departure from Insights and expectations of players in the market.

Lamudi had in a whitepaper released last year revealed that the trends that have influenced the increase in real estate investment in Nigeria over the past five years to include, economic development (71%), infrastructural development (62%), standard of living (57%), migration, both inward and outward (38%) and average population age (38%).

Substantiating the report, a National Bureau of Statistics (NBS) data shows that the real estate sector now contributes up to 15% of the recently debased gross domestic product, “as investing in building is considered to provide a significant multiplier effect on the broader economy as it contributes to GDP through two main drivers, namely, private residential investments and consumption spending on housing services.

The report contains that the growth recorded in the overall Nigerian real estate sector on a year-on-year basis stood at 11% in 2012, which was demonstrative of a recovery in the sector and following significant falls influenced by the global downturn in 2009/10.

According to a report by Agusto & Co., a leading pan African credit rating and research agency, activity in Lagos State accounts for at least 40% of the total Nigerian real estate market.

Also, Ernst & Young (EY) report on Foreign Direct Investment (FDI) in Nigeria, has been growing at an annual rate of 23.4% over the last six years; while the country’s economic outlook has previously dependent on oil & gas, the non-oil sector has witnessed strong growth across agriculture, telecommunications and retail services.

On technology trends in house-hunting, Lamudi’s analytics then shows, 30.5% of house-hunters searched for properties using a mobile device between May and October 2014; 43.26% of these visitors to the website used tablets to carry out the search, with 56.74% using other mobile devices.

But, incidences such as forex market fluctuations, lack of policy directions by the present Government, are the major contributory factors to the slow pace of the market.

“These are part of factors investors rely on before making investments. We are seeing continued growth in the lower market, but in the higher market, there is a slow. The market has been somehow stagnant for now,” Obi lamented.

He however, said that with the incoming Federal cabinets, it is expected that the government will make its policy thrusts clearer and for the restoration of investors’ confidence.