According to stakeholders, Canada’s decision to close its doors to foreign property investors will benefit the Nigerian real estate market.
On June 23, 2022, the Canadian government announced a policy prohibiting foreigners from purchasing residential properties as investments, which will take effect in the new year.
The policy, according to Kolade Adepoju, Chief Executive Officer of Riel Homes, is a positive development for the country’s real estate sector.
Nigeria’s Real Estate Industry
“Nigeria’s real estate industry remains one of the most profitable in the world. So it is past time for us to invest on our own and pour our money back into our economy. Regardless of how bad Nigerian real estate is, it is a good investment. It might be a bad investment elsewhere, but not in Nigeria. In Nigeria, for example, inflation does not have a significant impact on the real estate market.
The realtor stated that investing in the Nigerian real estate market is a goldmine, and that Nigerians should work together to develop the country’s real estate industry.
In the same vein, Damilola Ajomale, Chief Executive Officer of Hilltrust Limited, stated that it was a good one for Nigeria’s real estate sector, adding that he did not believe the policy restriction was a complete shutdown.
“At the end of the day, I don’t see it as a necessary evil. Let us instead concentrate on the Nigerian real estate market. There is so much room. There are many excellent architects in Dubai, but they lack the necessary space to practice effectively. Bringing them to Nigeria and exposing them to better building structures.
“As a result, the market should prioritize outsourcing expatriates, particularly to train people in the country’s sector, leaving us with a more developed market with skilled workers.”
Meanwhile, Dr Babatunde Adeyemo, Chief Executive Officer of Pelican Valley Nig Ltd, stated that the new Canadian real estate policy would have both positive and negative effects on the local industry.
“It is going to have a positive effect on the Nigerian real estate sector because this would encourage Nigerians in Canada to invest at home, and help the economy of the country. This new policy is a win-win situation for the Nigerian real estate market because it will reduce capital flight.
“This would allow Nigerians to profit and reinvest in the Nigerian economy. Most Nigerians in the diaspora reach a point of actualisation between the ages of 50 and 60. They come to Nigeria to buy properties after achieving their goals, which is a form of capital flight.”
According to him, the policy’s negative impact would be the issue of trust, adding that most Nigerians are untrustworthy and would seek out people of integrity to invest with.
Also, Dr. Aliyu Wamakko, President of the Real Estate Developers Association of Nigeria, stated that the Nigerian real estate market is not dependent on the Canadian market, and that what the sector does is dependent on local investment.
Canadian Property Policy
Furthermore, the new policy forbids foreign corporations and people from buying residential real estate in Canada between January 1, 2023, and December 31, 2024 if they are neither Canadian citizens nor permanent residents of the country. The ban shall not apply to any contractual obligations arising or assumed prior to January 1, 2023.
Certain key components of the ban are still being worked out and will be subject to additional regulations expected later this year. The classes of people exempt from the ban, for example, and whether the ban will apply to vacant land that may be subject to residential real estate development in the future, remain to be determined.
The law was passed, according to a CNN report, as a result of a rise in Canadian home prices since the pandemic’s outbreak and some politicians’ convictions that foreign investors were responsible for snatching up the available housing as investments.
“The demand for Canadian homes is luring profiteers, powerful corporations, and foreign investors, which is fueling rampant speculation, driving up prices, and creating a real problem of vacant and underused housing. The party of Prime Minister Justin Trudeau stated on its campaign website that “homes are for people, not investors.”
“Canada has earned a reputation as a multicultural country that welcomes people from all over the world. The prohibition on non-Canadians purchasing residential property, as currently proposed, “may have an impact on our reputation as a welcoming nation, but the potential benefits of the ban are likely to be modest,” it said.
