Naira-priced properties gain as devaluation gives investors advantage

Despite the lull in the property market, which by the third quarter of 2016 had seen 72 percent rise in vacancy rate in the highbrow locations, there is demand for properties whose prices are naira-denominated, BusinessDay findings have shown.

The new demand wave which is mainly for residential properties in the high end submarkets such as Ikoyi, Victoria Island and Lekki in Lagos, Asokoro, Wuse, Garki etc in Abuja and Trans Amadi, both Old and New GRAs in Port Harcourt, is driven by buyers coming into the market with foreign currencies.

This is against what obtains in the commercial segments of the market, especially in prime office and retail space where rents and sales prices are predominantly dollar-denominated. “This class of properties is struggling because of the challenges in exchange rate”, says Bolaji Edu, CEO, Broll Nigeria.

The local currency in Nigeria has been devalued to a ridiculous level where the naira exchanges with the dollar at about N475 to a dollar, and about N530 to one pound, giving potential investors or home buyers who earn income in dollars or have access to dollar or pounds advantage in the local market.

“We have seen increased interest from Nigerians in Diaspora to invest in property here, especially in those that are naira-denominated, because they are considered relatively cheap because of the weak naira which gives strong currency holders advantage”, Edu noted in an interview.

CHUKA UROKO