Nigeria Real estate Trends Post COVID -19

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Clearly with the COVID 19 pandemic things are changing across different industries. The big winners are people who are able to strategically shift along the changes in their industry of operation.

The real estate industry is not an exception. Change is definitely coming. We have spoken about the need to adopt technology more, but is this the only change expected?

We have been doing some reading and research for some time and we came up with some changes which we expect.  These are just our opinions. They could be right and they could be wrong.

Some of the shifts are new, while some were already happening, but we believe will be accelerated due to the pandemic.

Trends we expect to catch on

Monthly Rent payment as against yearly rent 

This will majorly affect major urban centres like Lagos and Abuja. We have already seen a shift from landlords collecting 2 years rent upfront to 1 year. Earning power has declined with the dents in the economy so we anticipate monthly rents will become a way to attract tenants. From another perspective, rent to own properties which were previously unheard of are becoming a popular strategy for property developers to sell their product. Watch out, monthly rental payments might soon be a thing

Demand for Smaller Homes 

This was already a trend amongst developers. 2 bedroom and studio apartments are now popular and in demand. We expect the pandemic to accelerate the demand for these housing types. Plus they are better suited to monthly rent payments

Modular Housing

Prefabricated homes, modular construction and container architecture are just a few of the building technologies that have tried to break into the market with limited success. Most times they are not cheaper as expected, and are plagued by poor quality issues. Lots of progress has been made bringing down cost and improving quality. This is exactly what the market needs following the effect of the pandemic. Watch out for more of these types of housing.

Renewable energy and Technology 

According to statistics released by Nigeria property center which is a leading sales and rental platform, 60% of demand they get is from renters, while 60% of properties listed are for sale. We have more people looking to rent and large parts of that demographic are millennials. Broad band internet, internet of things, solar power, use of energy efficient appliances are a given for this group and also the generation x who have more earning power. Incorporating these smart technologies into smaller house as a standard service, where landlords accept monthly rent payments could be the perfect mix to win in a struggling economy.

Strategic Partnership 

‘Joint Ventures’ which is our favourite term for strategic partnerships, are expected to rise. Based on statistics recently released by the national Bureau of Statistics, banking sector credits  granted to the real estate sector was N753 million in quarter 4 of 2017, N622 million in quarter 4 of 2018  and  N609 million in quarter 4 of 2019. This year on year decline indicates alternative and creative ways of funding real estate is required. Joint ventures can come in to fill the gap and that’s why we believe in them.

These are our thoughts. When change occurs, it’s great to be ahead of the curve, but who really knows which direction the curve will turn?

We would love to her your thoughts. Give us a Buzz below.