CURRENT MARKET SENTIMENTS CONCERNING PROPERTY PRICES IN LAGOS

Many people still believe property prices are too high 

Market sentiments the world over is never static but statements like “when would property prices come down?” has been prevalent in the Nigerian property market for a long while.

Although In the past 12 months, a gauge of sentiments concerning property prices showed some improvement, it still remained solidly in the negative territory, against a backdrop of a fall in the buying power of many. This can be seen in the fact that although property prices did not rise astronomically (A 3 bedroom luxury flat that sold for N45million in early 2012 has increased in price by just 6.7% to sell for N48million at present), many people are still of the view that prices are way too high. This attests to the fact that this is a perception problem that needs to be worked on by Estate Agents.

Mr Titus Oludaisi of Jide Taiwo & Co believes that some buyers generally do not really consider the value of the house before saying the price is too high. He is of the opinion that convincing buyers that prices are fair by looking at it from the rental returns they would be making from a property is a good strategy. “When you break down values in terms of facts and figures, they begin to reason that the price is fair,” he explained further.

Mr Chiedu Egbuonu, a partner with Country Home Real Estate has a contrary experience. At the times he had tried to do some arithmetic by calculating the rental return on investment, he finds that the property is not as attractive. So basically, he resorts to telling buyers that the price he is offering is the going rate. “I also tip in the fact that the property appreciation is high in locations were I sell and I project what the property would likely sell for in a few month’s time,” he added.

He opines that buyers in the medium and low income property market segment hold greater negative market sentiments. 

In another interview, Mr Gbenga Shodunke, an Estate Agent  with Ubosi Eleh & Co. is of the opinion that Estate Agents can reduce such sentiments by telling prospective buyers of the number of properties that have been sold and how much they were sold for. 

International Sales Expert Alen Mayer Explains that price objections could be viewed from three categories: 

Those that object mainly because the prices are higher than they can afford to pay. These customers desire a cheaper grade of products. 

Objections that are made solely for the sake of argument. Many customers think it is their duty to make many objections in the course of buying, and their most frequent objections are to price. 

Those objections which are made with all sincerity. The customers object because they sincerely believe that the prices are too high for the products. They are sincere in their objections, and believe in what they are saying.

He advises that when you encounter a price objection from your prospects; try to understand to which class of this three this objection belongs and then try to handle it properly.

 Original copy found here: Current Market Price