Real estate business: Low interest rate means this is the best time to build – Olusegun Ajanlekoko, Pres., CASLE
As economic activities grind to a halt world wide, and government are being put under deeper strain to offer stimulus packages, the President of the Commonwealth Association of Surveying and Land Economy (CASLE), Olusegun Ajanlekoko, said smart real estate developers should take advantage of the unusual low interest environment to build. The real estate expert made the assertion, recently, while responding to questions relating to the ongoing COVID-19-enforced lockdown in some parts of Nigeria.
However, he admitted that despite the availability of cheap borrowing, buyers may be hard to come-by. This is because buyers are presently pressed for cash owing to the weaker global economic activities.
Ajanlekoko explained, “Globally, low economic activity affects the construction sector in a dramatic way. Construction and sales will nosedive”.
He added, “But for a shrewd developer, this is the best time to start development because of the cheap funding that is now available through the drastic reduction in interest rates. Albeit building for the immediate future. But generally is bad news all round. Timely delivery is no longer achievable. And new projects will be on hold.”
The President of CASLE went further to call on government to soothe the economy by coming up with more effective stimulus packages to relieve the market and citizens.
The Central Bank last week ear-market several stimulus packages to boost the capacity of commercial banks to continue to support the economy. Part of that is a N50 billion soft loans for SMEs.
The soft loans are in additions to several efforts promised by the apex bank to buoy the activities of banks in this austere period. More, globally, the Fed in the US is cutting rate, and the EU Central Bank is working out stimulus packages for members while mortgage refinancing is being mooted in UK to forestall recessions or meltdown.
Nigeria’s commercial nerve-centre, Lagos, is enforcing a ban on large gathering to curb the spread of the Coronavirus. This is expected to affect business activities leading to low returns, and consequently fewer disposable incomes, for citizens. The effect will be felt across all wallets.