Real estate sector seen losing 50% revenue as coronavirus impact weighs

Experts in the real estate sector of the Nigerian economy have said that the impact of the deadly coronavirus on the sector may be the worst in history, projecting that the sector could be losing an estimated 50 percent of expected revenue by the turn of 2020.

The whole of Africa is in for it with Nigeria and Angola predicted to be the worst hit in terms of job losses and unemployment levels, the experts added, fearing that the current experience could take the sector back to the 2005 global economic crisis situation.

The deadly virus which has proved that it is no respecter of persons, places or positions, is hitting global real estate so hard that even mature markets like the UK, US and others are caving in as the impact of the virus weighs heavily on them.

In the US, for instance, there are over 43 million renters nationwide. The rental market makes up nearly 40 percent of all housing in the country where it is reported that at least 20 million jobs were lost in April. While outof-work renters scramble to make their payments, landlords are wondering how to service an avalanche of debt and unpaid taxes.

According to an Urban Institute Survey from last month, almost half of renters report some kind of financial hardship. The cascading effect of unemployment is severe, especially in shut-down cities like New York, where nearly 70 percent of the population rents.

The Nigerian experience seems worse. According to a Pison Housing Company report on ‘The State of the Real Estate Market’, about 80 percent of Nigeria’s 200 million population are renters and majority of them are the ones currently facing paycuts and job losses in various workplaces.

Chudi Ubosi, principal partner at Ubosi Eleh+co, estimates that 60 percent of renters in the country won’t be able to pay their rents in the coming months, meaning that six out of 10 renters will default in their rent payment on account of COVID-19 impact.