A recent research by Lamudi Nigeria, the fastest growing online real estate market place, has shown that Nigerian has the cheapest land among emerging markets of the world. On the average, land costs $150 per square metre in Nigeria while it costs as much as $605 per square metre in Myanmar, the country with the largest rate among the six emerging markets considered.
According to the report, Nigeria offers some real potential in the medium to long term among the emerging markets. To Lamudi, the main question on people’s minds when they think about investing in Nigeria is whether it is safe or not. Security concerns and political instability have been part of the landscape in the country for decades. However, there are too many opportunities in this rapidly developing country for it to be discounted. “The country is Africa’s largest foreign direct investment recipient, and the non-oil sector is now growing faster than its oil counterpart. The 183 million plus population is enough of an untapped resource to grab the attention of investors.”
According to the report, the land situation in Myanmar is a clear sign of a country’s emerging economic status. It is a country considered very prudent in its investment strategy since its “lost decade” in the 1990’s. Investors from Japan are trying to mitigate their riskier assets in China with the fast expanding Myanmar. This country has come out of its shell in the recent past, after years of economic isolation under a military junta. The ruling party has lifted sanctions on foreign investment and large multinationals like Walmart and Coca Cola have arrived to this land of milk and money. The rapid economic development has trickled down to the real estate sector. Costs for land have increased steeply, but good opportunities can be found with extensive due diligence.
The average cost of land in Pakistan is $258 per square metre. While Pakistan is technically not an emerging market but a frontier market, it is on the verge of graduating to this grade in the near future. What attracts the eye of investors is the potential for significant returns, even greater than in emerging markets. This was where Brazil and China were in the 1990’s and today, they are doing very well economically.
Despite the fact that the country’s population is greater than Russia’s, its stock market is only about the same as Greece’s. Real estate is a safer way to diversify your portfolio in frontier nations, as the risk is considered lower than playing the more volatile stock exchange.
Despite its diminutive size, Mauritius has caught the attention of investors across the globe. They look at this small island in the middle of the Indian Ocean and see opportunities. It is now seen as a gateway to Africa and offers competitive corporation tax rates. The average cost of land in that country is $114 per square metre.
Mark Twain famously said that: “heaven was copied after Mauritius”; held in high esteem by writers and business people alike, it is now deemed an important economic hub in the region, linking up India and Africa. The stock exchange has returned over 50 percent in the past five years. Land is a soft approach to entering this high growth market.
Of the 21 world’s megacities, 12 are now in Asia, and Bangladesh’s capital city Dhaka is considered the fastest growing of them all. Key infrastructural expenditure has been carried out by a progressive ruling party. Favourable tax terms have been introduced to encourage foreign investment and industrial zones have been established.
Land prices have crept up in the recent past but key plots in undervalued areas can present a solid medium to long term proposition. Average price of land is $209 per sq. Metre.
Indonesia is an archipelago combining thousands of islands is considered high potential for South Asia. With an abundance of natural resources, a young educated workforce and a fast growing domestic market, the foundations are in place for sustained economic growth. Its average cost of land is $259 per square metre.
While it is the second most expensive place to buy land on our list after Myanmar, there are many undervalued regions with high growth potential. With the help of a local agent, you can identify some real estate that will hold its value in the long term. It is expected that Indonesia’s economy will be bigger than Germany’s by 2030 so there is significant untapped potential.
To Kian Moini, the co-founder of Lamudi, despite higher levels of risk in the emerging markets, the rewards are substantial. “Land, particularly in the emerging markets is a key part of a balanced investment portfolio” He said that it is evident that land is a safer investment than precious metals like gold and silver; and when the stock market is volatile it becomes a safe haven for protecting an individual’s wealth.
By Pita Ochai