Influence of the Novel Coronavirus Disease on Nigerian Real Estate Sector and the Way Forward

Abstract

The coronavirus disease outbreak which occurred in 2019 at Wuhan, Hubei Province in China became a pandemic in 2020 such that over 200 countries have been affected and had to lockdown on economic, social and political activities so as to maintain both social and physical distancing to curb the dispersion of the virus. Global economic growth came to an abrupt halt, as a result of the effects of the pandemic on social and economic activities - countries around the world have implemented changes to real estate policies in order to reduce the effects of the lockdown on the citizens who are tenants and, in some cases, landlords. In the United States, many decisions are made at the state and local levels to prohibit eviction of tenants. Many countries are considering legislations that would protect tenants who cannot pay rent for a period of six months. Due to this global lockdown resulting from the pandemic, Nigeria is currently facing financial crisis which has directly/indirectly affected all sectors of human endeavor including the real estate sector of the economy. In all, the usual way of life and work system is changing and some of the upcoming trends will become part of the ‘new normal’ in the Nigerian real estate sector.  The researchers used survey method in obtaining data by distributing questionnaires to respondents. Data collected were collated and analyzed using table, simple percentage and mean. Findings reveal that the outbreak has had an adverse effect on many tenants’ ability to pay rents and have also led to a decrease in investment yield for residential and commercial real estate as a result of the economic "lockdown" in the country. The study suggests that, although all forms of real estate investment produce viable returns, it will be a wise investment decision to capitalize on the agricultural real estate sector during this pandemic as well as the post-COVID era. It also recommends that the Nigerian government should create an enabling environment to encourage investors, by coming up with policies that will help ease the effect of the pandemic on real estate investment.