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Published On: Wed, Aug 12th, 2020

Coronavirus may affect property market in Nigeria – ESV.Ugorji

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By Mashe Umaru Gwamna

An Estate Surveyor and Valuer, ESV Mark Ugorji has said that the coronavirus with the attendant lockdown on both the movement of people and the economies of nations will change the way people feel about property.
Ugorji, told our property reporter yesterday in Abuja that the pandemic has the capacity to have a huge impact on the property markets all over the world.
“It is glaring and obvious that with massive job losses, wage cuts, glout in business activities leading to business failures and several other uncertainties, a lot of people will be extremely careful over making colossal investment of their lives which is buying homes.
“From the above assertions, it implies that house prices will fall as it has been during any global recession and economic crunch. The effect of coronavirus is global, Nigeria is not exempted from it, for instance in the UK, the National house price index for month of May showed that prices fell by 1.7% from the previous month, the target decline for 11 years.
“We can see that with the lifting of lockdown restrictions, housing, businesses and economies are recuperating gradually.”
“Nigeria is a special case, as other countries are giving palliatives to mitigate the effect and impact of Coronavirus pandemic by giving moratorium on evictions and defraying rents owed as a result of the pandemic, Nigeria is a totally different scenario. The interest and wellbeing of the people are left in their hands though the government is doing their best but it appears the problem of Nigeria is hydra headed and too complex to handle.”
He said, putting moratorium on evictions transfers all the burden to the Landlord and banks, which doesn’t imply that there won’t be issues further down the line.
He added that the upsurge of the unemployment (loss of jobs) and people realising they can work from home and avoid travelling and office will ultimately have impact on the market. “With the Coronavirus pandemic people are now considering about how and where they work and live.
“Industrial and commercial properties are the worse hit because people are frightened by the rising number of Coronavirus positive patients in the country, the lockdown restrictions on international flight to and from Nigeria is affecting these types of properties adversely. By experience, major people patronizing the industrial estates and commercial are expatriates. Statistics show that most of the industrialists can’t even renew their rents now, no new entrants into the industrial sector, some of the expatriates that travelled out can’t find their way back to the country to do business and some that had concluded plans to establish in Nigeria are trapped in their various countries.”
The expert said that commercial properties may be decaying soon if care is not taken as coronavirus is promoting online marketing.
He noted that people now shop online to avoid contact with COVID 19 infected people in the course of onsite buying. “The trend is towards fewer shops and more service centres for other things you can’t get online. Rental property market is possible to experience a long term fall when existing and prospective tenants find it difficult to pay or renew rents.
Rental parks, discotheques, multipurpose halls are on the verge of total abandonment if they are not making money and cost of maintenance increases. These are the dangers of coronavirus and if it continues to wreck havoc as speculated the property market will die naturally.”
Also, he said in Nigeria people are living as though COVID 19 is not real and non-existent markets are usually filled with people shopping, “majority of the people are not observing the COVID 19 control measures put by the National Centre for Disease Control NCDC, at least to wear face or nose masks, regularly washing one’s hands and keeping hygienic distance from others.
“Inspite of the negative impact of COVID 19, the inflationary rate is skyrocketing and leaving the masses in abject poverty.
However, the property market has two pronged possibilities at work notwithstanding the rapidly changing times. Firstly is that though price of property may fall, it will always be wise to invest in it. Though this may sound absurd but property is a long term investment and it is more secured than any other investment. The reward is highly futuristic and rewarding.
“Secondly, the property market is highly flexible. The use of land and buildings can change overtime and most times it does that rapidly. We have seen very old properties renovated and given face lift that causes it to command very high prices due to remarkable changes within the location the property is sited.
The COVID 19 may deal a heavy blow on the property markets, but it will only accelerate changes that are already taking place.”

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