Bello-Osagie highlights impact of COVID-19 on real estate sector

The Chief Executive Officer of Hampton-Row Real Estate, Kazeem Bello-Osagie has highlighted the effects of the Coronavirus pandemic on the real estate sector in Nigeria, painting a bigger picture of the economy with the attendant effect of the dwindling global oil price.

Speaking in a recent interview, he observed that the real estate sector of the economy does not operate in isolation, adding that the biggest dip in Nigeria’s economic fortune has been occasioned by the downward spiral of oil prices across the globe.

According to him, “As you know, we are an oil dependent economy and the recent unprecedented crash in the oil prices in the global market, indicates that government will slow down on their spending, which will have a snowballing effect on the real estate market, spiraling down to property developers. Another catalyst in the past for the real estate growth in Nigeria has been funds from the Diaspora and most of these developed economies that warehouse these funds are already in recession, hence we can foresee the ripple effect it would have on Nigerians wanting to repatriate funds, to invest in the real estate market in Nigeria.”

Speaking further, he said they have had their own share of drawbacks which have pretty much been the case with other sectors of the economy in the COVID-19 era.

He said, “ For us at Hampton row, it has directly affected us , as we have had to suspend construction in line with the social distancing and lockdown order. It has also slowed down sales, as the mindset of potential subscribers is that cash is king now, especially as we are dealing with a virus, that the world still does not understand, making it difficult for a potential subscriber to plan and forecast . These are really difficult and scary times , but there will still be a lot of positives in the post COVID-19 era in the real estate sector once the world can wriggle her way out of this crisis.”

He however expressed his optimism that things will pick up and the world’s economy will once again experience upward trajectory of good fortunes.

“You cannot divorce the Nigerian economy from oil, once the prices in the world market drop, every other sector is directly or indirectly affected. In a nutshell , the real estate will benefit or will be sustained by the fresh demand for the Nigerian crude oil, once the western world returns to work. As you know the Nigerian Naira was recently devalued and the Naira has been on a free fall due to panic buying, thus this has placed Nigerians in the diaspora in a greater position to invest their Forex earnings, which will have a stronger purchasing power. Unfortunately there will be a lot of distress property sales available to the diaspora funds after the pandemic and most beneficial to this would be those in the brokerage chain like the realtors and real estate agents , they will benefit in commission for every sale. Another key takeaway in post COVID-19 era, will be the perception and the desire to owning a home will change, as a house is not only an investment but a shelter in time of crisis.

Worst case scenario is that cost of houses will depreciate , but sooner or later it will bounce back when the economy stabilizes. Because this is somewhat a Force Majeure and an unforeseen crisis. A lot of property developers may have to readjust their prices to an invincible market , thus creating a glut in the sector, especially as there will be distress sales of properties. I am however positive there will be a major bounce back for the sector,” he reasoned.

Kazeem Bello-Osagie is from the popular Bello-Osagie family of Edo State.

He was born 44 years ago to Chief Shittu Bello Osagie and Mrs Taminoene Amy Bello-Osagie. His father was a Managing Director in Bendel Breweries and Bendel Cement Company in the Mid-Western region during the Second Republic.

He established Hampton-Row Real Estates in 2014 , but had actively been involved in the real estate sector for over 15 years in the informal sector, while he still ran QUO Courier & Logistics before realizing there was a major gap in the housing industry in Nigeria, in areas of finishing and transferring real value to the end users.
According to him, their business model is building mini estates in clusters. Their signature project in Lekki is the “The Domicile By Hampton Row 1 & 2”.