The Central Bank of Nigeria  (CBN) on the 25th of November 2014 in Abuja announced  the devaluation of the Naira by N13 as part of measures the bank said were aimed at strengthening the nation’s economy. Has the decision by the Central Bank to devalue the Naira strengthened or weakened the real estate industry in Nigeria?  Is there a silver lining for the real estate industry amidst what looks to be a tough year ahead?

Since the official devaluation of the Naira in November 2014, the value of the naira has continued to decline. The current exchange rate currently stands at about N199 to $1 as compared to $165 to $1 in November 2014 buttressing the continuous devaluation of the Naira.

As the Naira continues to fall against the dollar, industry experts at RE/MAX Nigeria have predicted an average of 27 percent increase in the cost of housing projects. The effect of the depreciation is already being felt by developers as the cost of construction has risen since most of the materials for construction are being imported from foreign countries such as China. Due to high building materials, development costs have risen; notwithstanding the drop in demand resulting in a glut in supply of developments already in progress. 

Furthermore, the devaluation of the Naira has affected the availability of funds and interest rate as well as hindered the growth of mortgages in the country. The devaluation could easily be blamed on falling oil prices. Since Nigeria depends mainly on oil as its main source of revenue, drop in oil prices have huge impact on the Nigerian economy. 

Additionally, pre-election campaigning and spending also contributed significantly to the drop in the value of the Naira but a brief post-election bounce by the Naira has quickly fizzled and black market prices for the dollar have settled at around 220 Naira to a dollar.  Finally, according to a report by Tribune Newspaper, a significant amount of real estate projects in the country are funded (directly and indirectly) by government, meaning that drop in oil prices means less funds for property development.  And with governments struggling to even make monthly salary payments to workers, contractors and organizations, there will be even less cash in circulation.

Another effect of Naira devaluation is what close industry watchers have described as ‘crisis of currency’. As the Naira continues its downward trail towards further devaluation, property owners and landlords, mostly at the upper end of the market, have chosen to transact their business in foreign currency rather than the Naira. Numerous stakeholders, especially property vendors, see this as an unwelcome development for a market that is still advancing, exhorting that dealers and purchasers must locate a meeting point or an exit plan so as to keep the showcasing going.

Is devaluation a bad idea?  According to Mr. Bode Adediji, of Bode Adediji Partnership, “the devaluation of the naira is not on itself a bad thing if there is a robust local capacity to produce, manufacture and distribute internally instead of importing materials from overseas.”  In agreement with Mr. Adedeji, Sparklight Group Chairman, Chief Toyin Adeyinka stated that the real estate industry in Nigeria has suffered the effects of devaluation largely because real estate developers depend mainly on imported materials for construction. He added that the effect of devaluation would be much milder if construction materials are produced locally thereby cutting down the cost of construction and in turn making properties more affordable for the average Nigerian.

So where does all this leave us as close followers of the industry?  It stands to reason that in any economic downturn, there is an opportunity.  The opportunity here lies in the ability to innovate and persevere.  It is important for all parties to demonstrate the true value of Nigerian real estate.  For too long, our infrastructure, design and construction do not match the premium prices that our real estate demands especially in the highbrow areas.  The barrier to entry in the marketplace has been too low and creative problem-solving has been lacking.

The players in the industry who recognize that 2015 cannot be “business as usual” are primed to thrive in the short-term and dominate in the medium term.  It is all the more important that developers find new and quality local (and international) products and solutions; government find avenues of supporting mortgage growth and improve lands regulations; estate agencies deliver on holistic consulting services and quality customer service; and that buyers are more exposed and educated about their options in the market as well as find creative bargaining solutions.

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As you might have gathered, RE/MAX Nigeria is all for and about great customer service! It's what makes us refreshingly different from the lot.

Have you been trying to build strong long lasting relationships with your clients for a while now or are you just passionate for great service? Well, here are some tips that you could use to win over the most difficult of customers. It all starts from within!

Before real estate, Kim Scott spent 15 years in the hospitality industry working as both a waitress and a bartender, as well as eight years as an administrative assistant to a financial advisor, a position she still holds. “I learned a lot during those years from interacting with both happy and unhappy customers,” she says. Here’s what Scott has to say about offering superior customer service:

1. Empathy – The ability to relate to how someone is feeling and to understand what they are going through is a customer service skill that involves being able to see past your own frame of mind and see the world as someone else does. We may never see it just as they do, but trying can make all the difference.

2. Active listening – Always try to repeat back to customers what you hear them saying to you. This ensures you heard them correctly and gives the customer a chance to clarify if there seems to be a misunderstanding.

3. Problem solving – It’s crucial. Problem-solving derives from both empathy and active listening. You should be committed and have a sincere desire to solve the customer’s problems. The ability to ask the right kind of questions will be a major factor in providing a solution. You also need to prioritize your time around their customers’ needs and wants.

4. Being proactive – It’s always better to anticipate than to react. Although you can’t predict all that’s coming during the transaction process, use your experience to minimize surprises.
5. Flexibility – Being overly rigid can make customers feel like they’re just a number. While it’s good to have systems and processes in place, you never want to be so bound to them that you’re unable or unwilling to try and accommodate customers’ unique needs and wants.

6. Friendliness and courtesy – It doesn’t get any simpler than this. And these traits go a long way in earning clients’ loyalty, and their referrals.

7. Professionalism – Never forget you’re representing yourself, what you stand for, your trade, and your clients with every move you make. Regularly ask yourself: “Am I giving every client the right impression of me and my service.

Source: ABOVE, the RE/MAX magazine abovemag.remax.com

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