Managing Risk in a Post-COVID-19 Economy: Investors' Perception of Lagos State Real Estate Sector
DOI:
https://doi.org/10.47672/ajf.1163Keywords:
Risk management, real estate, post-COVID-19 economy, Lagos State, NigeriaAbstract
Purpose: As the global community continues to grapple with the effect of the COVID-19 pandemic, there is a prospect of negative/undesirable business outcomes in Nigeria. The scourge has been a regular topic of discussion in businesses, policy-making, and the academic community in many countries around the world. The pandemic has introduced a novel systematic risk class in the real estate sector. This study investigated how real estate investors in Lagos State perceive the emerging business climate following the pandemic.
Methodology: The study had a population of 2,400 while a sample size of 240 was drawn using a 10% rate. The study adopted a descriptive survey design. The statistical Package for Social Sciences (SPSS) was used to analyze data collected through questionnaires.
Findings: The findings showed that COVID-19 had a significant relationship with the level of investment in real estate in Lagos State though at a weak linear associative level. Secondly, while risk managers in these sectors have adopted different strategies to minimize their risk exposures, the study revealed that funds providers are placing a higher risk premium on investible capital as a result of uncertainties in the economic outlook occasioned by the COVID-19 pandemic. However, the study shows that the demand for real estate property in Lagos State was not negatively affected to a significant extent as a result of the pandemic, but rather a shift in preferences by property owners and occupiers. The study has implications for taxation and housing policy as well as business planning decisions.
Recommendation: The study recommends that government should create a favorable investment climate for real estate investors with appropriate risk mitigation measures that can reactivate the real estate sector while aiding its recovery from the COVID-19 debilitations.
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Copyright (c) 2022 Itotenaan Henry Ogiri (PhD), Hillary Nosiri, Suoye Igoni (PhD)
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