COVID-19 leaves huge shock on real estate market — Consultant

A real estate consultant, Meckson Okoro, has said that the shock created by the COVID-19 pandemic in the construction and real estate subsector would remain for a long time.

Okoro, managing partner M. I. Okoro and Associates, disclosed this in an interview with the News Agency of Nigeria (NAN) in Lagos.

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According to him, many construction and housing development companies have closed down, while rent is going up and sitting tenants find it difficult to renew their rents.

“There was no activity during the COVID-19 locked down. When the lock down was lifted, construction companies and housing development firms realised it will take millions of naira to undo the damage that had been created.

“Developers have gone back to the drawing board as a result of the increase in the cost of projects due to the rise in the prices of building materials,” he said.

Okoro said that unfortunately, banks are reluctant to lend money to the construction industry because of the huge capital outlay and the fear that the returns would not be quick.

“The chances of banks losing money in this period are high. Even landlords are finding it difficult to get rents from tenants and this has resulted in property development apathy,” he pointed out.

The consultant further said that the cost of building projects has gone high as some projects left unattended to during the locked down have been abandoned. In the process, the banks lost money as their clients were unable to pay back loans and the accrued interest.

Okoro, who said even when some developers took pains to complete projects, they found it difficult to lease or rent out such houses, also noted that the rising cost of building materials was not helpful as most of them were still being imported.

He said that a situation where only three companies were producing cement for the entire country did not give room for right pricing, and that the enactment of what he called a “bad policy’’ has contributed to unoccupied buildings on the Lagos Island axis.