Brexit triggers uncertainty, opportunities for investors in Nigeria’s property market
Although, Brexit does not mean that people will not be allowed into United Kingdom, but as the moment of departure slated for March 2019 approaches, experts say uncertainty surrounding the likely exit is weighing on the property market in Britain and may open a new vista for Nigeria’s real estate sector.
Amidst anxiety over possibility of Brexit and its accompanying impact on property market in the United Kingdom, experts are seeing some positive signals of UK’s withdrawal from European Union in Nigeria’s real estate.
The projection is based on the traditional, cultural and business ties the country shares with the colonial masters, which made London a destination of choice and second home for Nigerians.
UK is home to one of the largest concentrations of Nigerians in diaspora and reports say many Nigerians owe expensive houses in very primed locations in London.
But the increasing uncertainty which continued to trail the winning of confidence vote by the British Prime Minister, Theresa May last week has let to slide in value of property in United Kingdom.
Experts said the event might be opening a window of opportunity for property owners to exit, sell their houses and invest in Nigeria.
Already the market is plummeting in the midst of uncertainty, with prices sliding to all time low.
The latest forecast report in the market stated that property prices in the prime central London market have continue to be low by historic standards.
According to the outlook report from agents Strutt & Parker, the prime central London market was down to two per cent for houses in 2019 as a best case scenario and warns that there is a risk of prices falling by as much as five per cent.
“Substantial economic and political uncertainty remains both nationally and globally and this does not look likely to change any time soon.
The likely outcome of Brexit negotiations remains extremely unclear, with the potential for this uncertainty to continue longer than we hoped for,” said Stephanie McMahon, head of research at Strutt & Parker.
Renowned estate surveyor and valuer, Elder William Odudu said, Brexit offers opportunity for investment in Nigeria and not in UK’s property market.
Odudu, who is a former Chairman of Estate Surveyors & Valuers Registration Board of Nigeria (ESVARBON), said Nigeria property owners in the UK, especially residential owners should utilize the opportunity offered by Brexit to sell their property and invest in Nigeria to avoid further slide on the price.
“They should sell now that the prices are falling and value going down and invest at home to boost Nigeria economy. Since foreigners are removing their investments, Nigerians should remove their investment abroad and bring it home.
To avoid further slide on the price, they should sell with the price, they should sell and invest in Nigeria.
Brexit is an eye opener and opportunity to redirect the money invested in UK property market to Nigeria to revamp our economy”, he added.
Also speaking, Mrs. Udo Okonjo, the Chief Executive Officer/Vice Chairman of Fine and Country West Africa and member of the Oxford Real Estate Society, said exiting at this point might not be a wise option.
According to her exiting will amount to losing because the market is down and therefore it is not good time to exit.
“ If you have other options, you have use it but I will discourage exit for now”.
Okonjo stressed that Brexit presents an opportunity for investment.
“The only reason it is an opportunity is that those who will be exiting, are potentially in the UK because of the connection and the ties are now weaker.
It is also an opportunity for Nigerians,who are looking at UK as an investment destination.
The only inhibition is affordability as a result of our economy. But the President, African region, International Real Estate Federation (FIABCI) and principal partner, Ubosi Eleh and Company, Chudi Ubosi said, the fall in price will not attract interest from Nigerians because of some strict regulatory policies and high exchange rate of Naira to Pounds, that would have made investment in the UK property market profitable.
He observed that the monetary policy of the present administration stifled investment in property market by placing strict conditions on monetary transfers. Apart from the strict monetary policy, Ubosi said it makes no reasonable business sense to invest in the UK property market because of huge exchange rate.
For a Chartered Surveyors and Valuer, who is also the 15th President of the Nigerian-British Chamber of Commerce (NBCC), Akin Olawore, there is uncertainty and any time, there is uncertainty people do not want to invest.
According to him, people don’t want to buy properties when there is reduced demand, when demand goes down, prices will go down especially a couple of people like in Eastern Europe may want to take their money to an environment where there will be more money in their economy which will dampen the sales.
For those who want to exit, they must consider where they taking their money to, If you want to bring it here in Nigeria, they must consider the fact that Naira is sliding and values are going down.
So if they decide to sell what they have there and bring the money to Nigeria, they must consider the property clock.
He said, “If Brexit happens, what is the implication, who are the people leaving, why will money in the economy suffer, if the economy is not going to suffer, it means that the economy is going to get stronger, productivity will get high, people will not want to move where they are gaining.
Brexit does not mean that they will not allow people into UK, there is panic but we must not jump in because there is panic, people may be making mega profits before and prices are coming down, they may still be making profit”.