Politics shapes the trajectory of the real estate market mostly in Africa, politics, and the implications around a change of government alter the outlook of real estate markets, for instance, the tragic event that came from South Africa’s 1994 election led to mass migration, the result was a battered real estate market as people fled to other countries during the anxiety about the election outcome.
The mass migration caused the once-lucrative real estate industry to lose a lot of money in South Africa as the people who were selling the houses for a reduced price became the new buyers, and at the time it was hard for investors to know what was happening. We have seen similar outcomes in other African countries including Nigeria over the last 20 years, whether you are the from the political left or from the political right 2023 will be an exceptional year for the Nigerian history.
Analysts from various industries already know how the upcoming elections could potentially affect the economy of the country, on this note this article will discuss on two major trends that can predicted in Nigerian real estate as the country approaches the forthcoming elections.
For liquidity, large-ticket assets will be sold off.
Nigeria’s elections will increase the sale of high-end properties over the next 6-12 months, with a boom in property sales. However, most of these transactions will be kept private and undisclosed to protect the interest of participants, Nigerian public sector has strict campaign guidelines that politicians and their backers will have to adhere to.
This trend will fuel a boom in property sales, which presents an opportunity for savvy investors with good capital liquidity, high-end properties in core cities such as Lagos, Abuja and others will be disposed of over 6-12 months, this is like the market trend of 2015, and it will be an effective way for the government to have access to campaign funds needed for the impending election.
Numerous government-sponsored projects will be substantially completed.
In her appropriation bill for the year 2022, the federal government has allocated a total of N17.126 trillion to the consolidated revenue fund, a 30% increase over the previous year’s budget.
Capital expenditure allocation stood at N5.467 trillion, an increase of 51% from last year’s budget, The intention is to fund new projects and work on ongoing infrastructure projects across the nation. These past few months we have seen lots of recent success with public sector projects across Lagos state, multiple roads, and bridge networks across Ikoyi, Victoria Island, gbagada, kosefe and all other neighbourhoods completed in that period.
Many more road and bridge projects are in progress right now in Lagos state, the Government of Lagos state are looking to finish these projects by the end of the year. This includes Lekki regional road as well as infrastructure within the Lekki-Epe artery and all those sub-regions across the state such as yaba and Ikorodu. It is unclear if these projects are part of the strategy to win more votes in 2023, but some of the socio-economic improvement projects may influence Nigeria’s economy, we can expect to see growth In property values across key major cities in the country.
As the election approaches big-ticket assets will be sold under duress lower than the market price, and people may feel pressured by the election date, this will present an opportunity for investors with vast capital resources to make a profit from these good deals. Furthermore, we expect to see significant improvements in many of the government-sponsored projects as many are nearing completion. These improvements should boost property values across different districts.
How can these coming events be exploited by investors in the real estate
It Has been quite established that certain properties would be exchanged for prices below s market value to generate funds for the coming elections, furthermore, builders restrict future releases and focus primarily on selling off their existing stock.
Buyers of real estate should be on the lookout for any chances to save money by buying a property on the secondary or resale market, additionally, they should make a concerted effort to talk to the builder personally mainly due to real estate developers being focused on selling their unsold inventory, home buyers can wheel and deal to secure significant discounts on the chattel.