Should you invest in real estate before a General Election
With the 2023 General Polls approaching, potential real estate investors are debating whether to invest in real estate before or after the elections. Real estate stakeholders are also concerned and thrilled to learn the verdict and its potential influence on the market.
General elections have a tremendous influence on all businesses, including the real estate industry, in a rising economy like Nigeria. The economy’s development is hampered by the uncertainty surrounding the current administration. Infrastructure projects are particularly impacted since their destiny hangs in the balance if the administration at the centre changes, resulting in an indirect influence on the real estate landscape across cities.
With the real estate business finally adjusting after the covid-19 pandemic, industry analysts are predicting a strong showing in this year’s General Elections. The election season is an excellent time to invest in real estate since house prices are likely to drop, boosting the sector’s growth.
Buying sentiment in general during elections
Investors have been observed refraining from investing in the market during any upcoming General Elections, while potential investors adopt a wait-and-see strategy in expectation of further standard operating procedures from the newly elected/re-elected administration. In general, investors anticipate new rules, plans, and offers that may or may not be beneficial to real estate investments.
Investors aren’t the only ones who are affected. Developers, too, are in a similar scenario, preferring to clear existing inventory over launching new initiatives. This is due to the fact that during election season, developers may experience delays in receiving regulatory permissions for newly announced projects. Although home values fall during this period, they normally recover within a few quarters.
Should you buy a home during an election year?
In Nigeria, general elections are held every four years, and a large sum of money is spent on promotions and other logistics. Historically, stakeholders liquidate their assets and drain parked funds from the real estate sector during general elections. This causes a market liquidity crunch, leaving real estate developers cash-strapped.
It has also been noted that certain properties are sold below market value in order to obtain funds for the elections. Furthermore, builders limit new releases and concentrate solely on emptying their existing inventory.
Homebuyers should keep an eye out for any opportunities to save money by purchasing a house on the secondary or resale market. They should also attempt hard to negotiate and reach an agreement with the builder directly. Because most real estate developers are focused on selling their unsold inventory, homebuyers have the opportunity to haggle hard and secure significant discounts on the property.
While the Nigerian economy will undergo various changes as a result of the 2023 General Elections, only time will tell if the property market will alter or stay steady.