Real estate stakeholders have expressed optimism that property markets in sub-Saharan Africa are expected to undergo rapid recovery from Covid-19 constraints. The rate of recovery, especially in non-resource dependent economies, has been faster than earlier anticipated.
Speaking during the just concluded Africa Property Investment Summit, panellists who were mostly composed of bankers and developers, affirmed that funding for real estate is not going to be significantly affected post-pandemic.
“Real estate is generally uncorrelated to equity and fixed income market volatilities,” said Neville Mandimika, Economist and Fixed Income Analyst, Rand Merchant Bank (RMB).
He also said that with regard to the pandemic, the worst in dollar forex is now water under the bridge following a significant drawdown in forex over the past few months.
African real estate markets are expected to receive momentum from the on-going rural-urban migrations among other factors. The result is expected to raise demand for property in all segments further, necessitating the input of banks and other financial institutions.
“Given the structure of real estate investments, debt is intrinsic to it. Our focus is on cash flow sustainability,” Niyi Adeleye, Head of Real Estate Finance-Africa Regions at Standard Bank Group.
He said experienced real estate investors can leverage the sustainability of one asset by backing it up by another asset.
Real estate investors that had capital during the period appeared to have continued to pursue these investments, albeit at a slower pace while investors reliant on external financing mostly paused their investment activities.