Real estate investing is a lucrative business for a lot of Nigerians who have come to appreciate the tremendous value of owning a home.
These investors have been rewarded with huge rise in property values because of the growing population in Lagos, a situation that makes demand for housing somewhat higher that supply.
Consequently, when the global recession hit the developed economies of the world, Lagos property prices continued to rise.
Nevertheless, the decline in property prices eventually got to Nigeria due to the bank crises that eventually limited borrowing opportunities.
Property prices dropped significantly in many areas of Lagos due to the liquidity squeeze in the economy. This was most evident between September 2009 to August 2010. Business was not so lucrative for many real estate agents during this period, as purchasing power declined.
However, even while the market was depressed, millions of Nigerians still invested in property. This raises the question, "Is it prudent to invest in real estate in a time of recession?"
The answer is yes and no.
Yes, invest in real estate even in times of depression if you have no better way to invest the money, since real estate is a concrete investment.
No, don't invest in real estate during a time of recession if you can get a higher ROI from another investment option.
Property prices are gradually inching up again in Lagos. Those who bought homes while prices were very low are beginning to smile as they watch the market bounce back.
Real estate investment is a solid investment you can pass from generation to generation. So whether there is a meltdown or not, give attention to real estate investing.
Yes, you can diversify your investment. But do not neglect to invest in real estate.