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The Impact of Covid-19 on Real Estate Investment in Nigeria

Introduction

The coronavirus outbreak is having great impact on all sectors of the global economy in a 2020 which will long remain in the memory of every person who lived through the year.

Having originated from Wuhan in China, the coronavirus has spread to many countries around the world and consequently brought about reduced economic activities in those countries dealing with the pandemic.

Nigeria, which is the most populated country in Africa, is awakening to a new economic reality as a result of this pandemic. Lots of people have been infected by the virus regardless of ones' social status, as both the rich and poor have been affected and people are starting to lose their sources of income.

People are out of jobs, especially within the real estate sector, travel agency, in office spaces business, restaurants, hotels and more. Real Estate business involves buying, selling or renting of a property, houses or land. Real Estate agents assist homeowners, businesses and investors buy or sell, all depending on what they want to purchase or invest in.

As a result of the ongoing pandemic, most people that have either lost their jobs or whose salaries have been reduced are likely to have paid their rents in advance before the virus, and that could still help them get through till the end of the year since in Nigeria, house rents are paid yearly and not monthly unlike other countries such as the US or UK.

The pandemic has impacted the real estate market negatively, with people becoming hesitant to purchase or rent homes. For them, the period is not the best to invest in the sector as they do not know how long the pandemic will last and are only focused on how to survive through it.

According to a survey by Guardian News, the property purchasing rate in Nigeria drastically reduced by 80 per cent. And as the lockdown keeps getting extended another 54 per cent of respondents in the same survey reported difficulties in getting building materials for homes.

In addition, the lockdown and consequent need to maintain social distancing has led to potential buyers not being able to visit sites to physically see the homes they want to buy or invest in.