Nigerians are probably the most outward facing people in Africa. A conservative estimate puts the number in the Diaspora at between 5 and 15 million. In 2012, the amount of remittances sent home by those outside the shores of Nigeria was roughly $21 billion with $12.26 billion from the US and $7.76 billion from the UK. In 2016, this amount increased to $25 billion.
This means that in the period measured, Nigerians in the Diaspora contributed more to the Nigerian economy than 34 of the 36 states in the country with only Lagos and Rivers having higher GDPs.
The proportion of these remittances that goes into real estate is quite sizeable, raising the question as to why these people who live in societies where life is ordered and buying property is not ‘rocket science’, still have interest in buying property back home in Nigeria.
Besides the aphorism that there is no place like home, for a mix of factors, these people still have one eye on home and, like no time before democracy, this has given birth to an explosion of interest in returning for education of kids, business or residency. A fundamental part of this is having a home.
However, arguments persist that a significant amount of remittances sent are spent inefficiently on trying to acquire land and build houses. This proves difficult to do at a distance and results in significant losses by the Diasporas.
In spite of these challenges, interest persists and Yemi Edun, a director at Daniel Ford International, London, says “some of the reasons Nigerians in the Diaspora invest in real estate in Nigeria range from wanting to upgrade the living standards of family members still living in the country”.
This, he said, serves as a landing pad for their children who come back to study briefly and for holiday visits. “However, there are also permanent and semi-permanent basis for owning a home such as work, eventual relocation and retirement. There are examples of young men who relocated to start a popular betting company and two professors who retired to homes in Ibadan”, he said.
He advises however, that any Diaspora intending to invest in real estate in Nigeria is better served buying an already developed property. This would cost less time and headache than the process of acquiring land and developing it with all its attendant problems.
“But you must still be wary of who you purchase from and how. The advice we offer from experience is that people should only deal with trusted practitioners taking on bank-backed schemes in some cases.
“If buying off-plan, they should monitor the site as work progresses and even though overall quality has gotten better, we advise they should reserve 10 percent of the purchase price for improvements to their standard. The time to buy is now due to a weak Naira. In January 2014, £1 exchanged for N280, but in September 2016, £1 exchanged for N550, meaning their money (FX) would go farther”, he reasoned.
His advice for the developers is to be aware that they are dealing with enlightened clients who are used to a higher quality build. As such it would be wise to take that into account and deliver to expectation as any other developer who does would clear his order book a lot faster.
Diaspora Nigerians are more attuned to apartments or houses in gated communities. Decoration should be neutral, that is, use light colours and let design be minimal so the buyer can finalise to taste and can more easily see how they can get the property to where they want it to be. As much as possible, all connections should be pre-wired and appliances such as washing machines and combi-cookers should be fitted as standard.
The modern developer should also look to improve on general building levels by providing centralised boilers for hot water in the bathroom. Showers are in and baths are out. This is beneficial to the developer as he has more space to play with. Most people replicate showers with buckets and bowls and the Diasporas are already used to showers. So, it makes sense to eliminate space wasting baths and maybe have only one or two baths in a residence. Ideally, the most amount of money and attention should be spent on the bathroom and kitchen as these are where the value shows.
Smoke alarms are also a must for the security conscious and LED lights conserve energy and so are also important considerations. If the budget is sufficient, lightly furnish the apartment and create extra storage space for hoovers, shoes, etc. So, to sum it all up, the key to the diaspora is security, parking, neutral decor and facility management.
“A staggered payment plan will help shift inventory, secure commitment from the buyer and ensure the development is occupied sooner than later”, Edun advised, disclosing that his company has worked with various local practitioners in Lagos, Nigeria over the last 15 years and are always looking to take on new partners.
BY CHUKA UROKO