A real estate expert, Zubbi Nwosu, has warned that the value of real estate assets in Nigeria is losing value every year, even though it seems to be appreciating in naira terms.
Nwosu, who spoke at a recent real estate forum in Lagos, Nigeria, said that the situation for real estate and for virtually every sector of the Nigerian economy is “horrible.” He added that it is laughable to pretend that people who are investing in the real estate space have made a profit in the last five years.
“Many people have made a profit in naira terms, but in real terms or in dollar terms, they have actually lost money horrendously,” Nwosu said. “Most of Nigeria’s problems are predicated on the falling value of the naira.”
Nwosu said that the naira is falling because of a lack of leadership from the people in charge, and that the messaging is poor. He added that this has been going on for a long time, and that there is no real change of leadership because the same party is in power.
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“The government needs to reduce its spending and to improve the messaging around the economy,” Nwosu said. “The government needs to start acting and not just talking.”
Nwosu also said that the situation for real estate is particularly bad in Lekki, Banana Island, and Victoria Island in Lagos state. He said that there are far more units available for sale than any capacity to buy them. He said that the reason for this is that the pricing has remained visually high, so most of the sellers do not need the money.
“Many people took positions in real estate, hoping to pay school fees for their children abroad,” Nwosu said. “Now, when they need money, they find out that they would have been much better off if they had kept their money in US dollars.”
Nwosu said that the leaders of Nigeria need to come out and tell the people where they expect the naira to be in six months’ time, or even in three months’ time. He added that they need to look Nigerians in the eye and say that they will fight to keep the naira there. He said that this is the beginning.
“The politicians cannot be spending money frivolously, and that there must be accountability,” Nwosu said.
Nwosu’s comments come as the Nigerian economy is struggling. The naira has lost value against the dollar, and inflation is high. The real estate market has also been affected by the economic downturn.
Source: The Nation Newspaper
