Taking a wider glance at the markets that have been affected by COVID-19, real estate rank amongst the highest. Beginning with the retail and hospitality sector, we see a drastic decrease in occupancy rates in hotels and accommodations throughout major cities. Simultaneously, retail shops have been hugely affected as well, especially nonessential shops as a result of lockdowns. Shops such as fashion and goods stores are no longer operating which means less income, resulting in the previously occupied retail properties now being vacant. Contrary to that belief, essential shops such as supermarkets, pharmacies, and health care centers are considered anchors at this crucial time and have not been affected nearly as much.
This all makes investors in the field still very hesitant and forces them to look at past events such as the 2014 recession to aid in guiding them through this global crisis.Some of the new trends that the Nigerian real estate market have adopted is having investors show interest in the health sector (e.g. hospitals and clinics), instead of focusing on generic investments in apartment and office buildings.
Lastly, there is a predicted change in the near future regarding the office property market. Once employees begin going back to their offices, business owners will be expected to cut down costs by discarding unnecessary or extra office spaces when their contacts are due for renewal. Subsequently, this will mean a surplus in unoccupied office spaces in turn impacting the overall market. This might cause disturbance and worry to the people in the field as real estate contributed 6.21% to Nigeria’s Q4’19 GDP. (A statement made by the National Bureau of Statistics ‘NBS’)
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Endurance, O., 2020. Real Estate Posts Fastest Growth In 3Years At -2.36% In 2019 –. [online] Businessday NG. Available at: <https://businessday.ng/real-estate/article/real-estate-posts-fastest-growth-in-3years-at-2-36-in-2019/> [Accessed 6 July 2020].
Africa, C., 2020. The Impact Of COVID-19 On Nigeria’S Real Estate Sector – CNBC Africa. [online] CNBC Africa. Available at: <https://www.cnbcafrica.com/videos/2020/05/12/the-impact-of-covid-19-on-nigerias-real-estate-sector/> [Accessed 7 July 2020].