Secretary General of the International Real Estate Federation (FIABCI) Nigerian Chapter , Adewale Ajibade, has stated that most of the challenges in the real estate industry which usually account for high property prices stem from the importation of building materials, the devaluation and volatility of the Naira, and high interest rates.
Speaking on Business Outlook Africa, Ajibade highlighted the country’s inability to manufacture the majority of its own building materials, coupled with the devaluation and volatility of the Naira against the dollar, as major factors behind the high cost of properties.
“Most of the challenges are building materials. We do not manufacture any, I can’t highlight any building material that we manufacture, except Dangote Cement. Then there’s the volatility of the Naira, sourcing for dollars all of this affects the cost. That is why when you mention that the cost of property in Nigeria is very high, it shouldn’t be that way, but because of the devaluation of the Naira, it’s a lot of challenge,” he said.
Ajibade, however, said FIABCI-Nigeria is in talks with private and international investors to set up some of these manufacturing facilities locally, in order to help reduce the cost associated with building materials and real estate as a whole.
He also stressed the need for investors to seek the association’s services, arguing that although the Nigerian real estate market is one of the best on the continent, entering it without expert advice can be very costly.
“That is why we advise you to seek the services of professionals like us before you get into that. It is a good market, a very interesting market, but you need an expert to guide you through that journey,” he added.
Ajibade also called on investors to rethink what diversification means to them, urging them to pursue diversification on a continental level rather than a local one.
“You need to see the uniqueness of different markets in Africa and take advantage of it. Diversification shouldn’t be local anymore it should be continental. If you are a real estate player, you should think of diversification beyond your local environment. These are different opportunities with unique advantages. I cannot really say one market is better than another everyone has their peculiarities, because real estate is heterogeneous in nature,” he explained.
Watch full interview here;
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