2017: Experts want boost in investors’ confidence

2016 was a year many business investors saw as one of the most difficult and economically challenged in the annals of Nigeria’s economy.

Apart from being the year when the country officially dropped into recession, it was also a year where the nation witnessed a “massive” drop in it’s economic outlook, as evident in several hundreds of job loss, unprecedented drop in exchange rate with the naira plummeting to as low as N490 to a dollar in the parallel market, and a general drop in citizens’ purchasing power.

It will be recalled that the nation’s real estate sector as at end of third quarter 2016-recorded a megre 8.20 per cent sectoral contributions to Gross Domestic Product (GDP), which was a decline compared to 8.74 per cent recorded at third quarter of 2015.

All these, it is believed, negatively affected inventors’ confidence in the nation’s housing and real estate sector, and it is a return of this lost confidence that experts in the built environment want before other things can follow.

In a chat with the media, the Africa President for the International Real Estate Federation (FIABCI), Mr. Chudi Ubosi, insisted that the “biggest challenge” faced by the real estate sector in 2016, was the lost of both local and international investors’ confidence in the sector.

“It does not look as there will be increased confidence in 2017, if that remains the same, we will most likely witness an economy that will remain stagnated as in 2016 and may possibly perform worse.”

According to him, without a return of investors’ confidence, rental and capital values will remain at the same levels they were in 2016. “A lot of dollar denominated rents will continue to drop further as landlords seek willing tenants.  Commercial rents will also drop as people struggle with businesses that are held down by the economy,” he stated

Similarly, a seasoned builder and Vice President, Nigerian Institute of Building (NIOB), Mr Kunle Awobodu, noted that except something urgent was done to bring the situation under control, problems like continuous depreciation in the value of the naira will further drive investors away in 2017.

“2017 is pregnant with uncertainties. The unabated depreciation of the naira value will exacerbate the inflationary trend, culminating in review of bills of quantities. Foreign investors will still be skeptical of the Nigerian real estate sector,” he said.

In his view, an ex-president of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr Bode Adediji, posited that the real estate landscape had been dominated by governmental pronouncements without tangible result, noting that the property market had suffered an “unprecedented glut” as thousands of properties across the country remained unsold, abandoned and uncompleted.

Adediji predicts that the Year 2017 might even post a worse outlook, than 2016, if necessary measures were not put in place.  “Although a large chunk of allocation has been given to the Power, Works and Housing and Urban Development sector in the budget, this quantum of allocation money in real terms amounts to little when you factor in inflation and devaluation of the naira,” he said