Stakeholders have said that Canada’s decision to close its door to foreign property investors would positively impact the Nigerian real estate market.
The Canadian government on June 23, 2022, introduced a policy banning foreigners from buying residential properties as investments effective from the new year.
The Chief Executive Officer of Riel Homes, Kolade Adepoju, said that the policy was a positive development for the country’s real sector.
“Nigeria’s real estate industry is still one of the most lucrative industries in the World. So, it is high time we invested on our own, and pour our money into our economy. No matter how bad real estate is in Nigeria, it is a good investment. It may be a bad investment, but not in Nigeria. For instance, inflation doesn’t really eat deep into the real estate market in Nigeria.
The realtor stated that investing in the real estate market in Nigeria is a goldmine, adding that Nigerians should join hands to develop the country’s real estate industry.
In the same vein, Chief Executive Officer, Hilltrust Limited, Damilola Ajomale, noted that it was a good one for Nigeria’s real estate sector, adding that he did not feel the policy restriction was a complete shutdown.
“At the end of the day, I do not see it as a necessary evil. Let us focus on the Nigerian real estate market instead. There is so much space. There are lots of architects in Dubai that are really good, but they do not have the space to practice effectively there. Bringing them down to Nigeria, creating exposure to better building structures.
“Hence, the market should focus on outsourcing expatriates, particularly to train people in the sector in the country, leaving us with a more developed market with skilled workers.”
Meanwhile, Chief Executive Officer, Pelican Valley Nig Ltd, Dr Babatunde Adeyemo, said the new Canadian real estate policy would have positive and negative impacts 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. It is a win-win for the Nigerian real estate market as this new policy would curb capital flight.
“This would enable Nigerians to make profits and re-invest in the Nigerian economy. Most Nigerians in the diaspora attain a level of actualisation at age of 50 to 60. Having achieved what they want, they come to buy properties in Nigeria, which is a sort of capital flight.”
According to him, the adverse effect of the policy would be the issue of trust, adding that most Nigerians are not trustworthy, and they would be looking for people of integrity to invest with.
Also, President, Real Estate Developers Association of Nigeria Dr Aliyu Wamakko, asserted that the Nigerian real estate market does not depend on the Canadian market, adding that what the sector depends on local investment.
More so, the new policy prohibits foreign corporations and individuals who are not permanent residents of Canada or Canadian citizens from purchasing residential real estate in Canada between January 1, 2023, and December 31, 2024. Any contractual obligations arising or assumed prior to January 1, 2023, will not be subject to the ban.
Certain key components of the ban have yet to be determined and will be subject to additional regulations expected later this year. For example, the classes of persons exempt from the ban and whether the ban will apply to vacant land that could be subject to residential real estate development in the future is yet to be determined.
According to a CNN report, the law was passed because of a spike in Canadian home prices since the start of the pandemic and some politicians’ beliefs that foreign buyers were responsible for snapping up the supply of homes as investments.
“The desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors, this is leading to a real problem of underused and vacant housing, rampant speculation, and skyrocketing prices. Homes are for people, not investors,” said the campaign website of Prime Minister Justin Trudeau’s party.
“Canada has built a reputation as a multicultural nation that welcomes people from around the world. As currently proposed, the prohibition on the purchase of residential property by non-Canadians can impact our reputation as a welcoming nation, the potential benefits of the ban are likely to be modest,” it said.