Price hike may discourage investment in real estate —Chudi Ubosi
Real Estate Broker and Former President of the African Chapter of the International Real Estate Federation, Chudi Stephen Ubosi, tells Castle Lifestyle correspondent, Ridwan Adelaja, how fuel subsidy removal policy may affect real estate players and disrupt the entire industry.
How has the recent increase in fuel prices and unification of exchange rate impacted the real estate industry?
It is still a bit too early to feel the impact. But one thing is certain that in the future it is likely that prices of real estate within the center will rise as people move nearer to their places of work or wherever it is that they spend more time so as to mitigate cost of travel. Demand will rise and push prices up. Prices of real estate materials will most likely rise and in effect impact property values higher. However it is still a bit early in the day. We expect these effects to begin to kick-in in another 30/60 days when the full effect would have set in.
In what specific ways do rising fuel prices affect property buyers, sellers, and investors?
I expect that there will be a lot of in depth review of operations and expenses. My take is that as prices increase there may be less money to invest in real estate. There maybe fewer investors as we battle with increased costs etc. However, in my opinion, I am of the belief that this will be short lived because of the role real estate plays in our national life.
Are there any notable shifts or trends in the real estate market as a result of higher fuel costs?
None yet. I think it’s a little too early. But with time we will notice. I estimate about 90 days thereon.
How do rising transportation expenses influence property values and rental rates?
Rising transport costs make it imperative for commuters to live close to their places of work or business to conserve their salaries and stretch same. This may mean that in the long run house rents may rise in the city centers, business districts etc.
Are there any strategies or recommendations you would suggest to real estate stakeholders to mitigate the effects of increased fuel prices?
At the moment things like pooling cars will work. A hybrid of driving half way & and public transportation depending on the individual and dynamics involved.
Moving closer to the office etc may help mitigate rising costs due to fuel increase.
Considering the Kwara state hybrid policy, what does this mean for the Office market sector if other states follow suit?
I do not see an impact this will have on property values. Most government offices are housed in their own public buildings. And for the few that are housed in rented commercial spaces, I doubt it will impact on values. You don’t rent a space for 3 days or 2 days except one is running a virtual office. And govt cannot run from virtual offices. When you hire a propertyand the rent is paid, the Landlord is not concerned about whether you work 2, 3 or 7 days a week. In the final analysis, rental properties will not be impacted.
This post is culled from Castle Lifestyle Magazine. Read here.
