Stakeholders have said that Canada’s decision to close its doors to foreign property investors would have a positive impact on the Nigerian property market.
On June 23, 2022, the Canadian government introduced a policy that prohibits foreigners from purchasing residential property as investments starting in the new year.
Riel Homes CEO Kolade Adepoju said the policy was a positive development for the country’s real sector.
“Nigeria’s real estate industry remains one of the most lucrative industries in the world. Therefore, it is about time that we invest on our own and invest our money in our economy. No matter how bad Nigerian real estate is, it is a good investment. It may be a bad investment, but not in Nigeria. For example, inflation does not really deeply affect the real estate market in Nigeria.
The real estate agent stated that investing in the Nigerian real estate market is a gold mine, adding that Nigerians should come together to develop the country’s real estate industry.
Along the same lines, Hilltrust Limited CEO Damilola Ajomale noted that it was good for Nigeria’s real estate sector, adding that he did not feel the tightening policy was a complete shutdown.
“At the end of the day, I don’t see it as a necessary evil. Let us focus on the Nigerian real estate market. There is a lot of space. There are a lot of architects in Dubai who are really good, but they don’t have the space to practice effectively there. Bringing them to Nigeria, creating exposure to better building structures.
“Therefore, the market needs to focus on expatriate outsourcing, particularly to train people in the sector in the country, leaving us with a more developed market with skilled workers.”
Meanwhile, Pelican Valley Nig Ltd Chief Executive Dr. Babatunde Adeyemo said the new Canadian real estate policy would have both positive and negative impacts on the local industry.
“It’s going to have a positive effect on Nigeria’s real estate sector because it would encourage Nigerians in Canada to invest at home and help the country’s economy. It is beneficial for the Nigerian property market as this new policy would curb capital flight.
“This would allow Nigerians to profit and reinvest in the Nigerian economy. The majority of Nigerians in the diaspora reach a level of updating between the ages of 50 and 60. Having achieved what they want, they come to buy property in Nigeria, which is a kind 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 would be looking for people of integrity to invest with.
Furthermore, the President of the Nigerian Real Estate Developers Association, Dr. Aliyu Wamakko, stated that the Nigerian property market is not dependent on the Canadian market, adding that the sector is dependent on local investment.
Furthermore, 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 out of or are assumed before January 1, 2023, will not be subject to the prohibition.
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 people exempt from the ban and whether the ban will apply to vacant land that might be subject to future residential real estate development have yet to be determined.
According to a CNN report, the law was passed due to a surge in Canadian home prices since the start of the pandemic and a belief by some politicians that foreign buyers were responsible for grabbing the supply of homes as an investment. .
“The lure of Canadian homes is attracting speculators, wealthy corporations and foreign investors, leading to a real problem of underutilized and vacant housing, rampant speculation and skyrocketing prices. Houses are for people, not investors,” the campaign website for Prime Minister Justin Trudeau’s party said.
“Canada has built a reputation as a multicultural nation that welcomes people from all over the world. As currently proposed, the ban on the purchase of residential property by non-Canadians may affect our reputation as a welcoming nation, the potential benefits of the ban are likely to be modest,” she said.