Why Real Estate Remains the Safest Investment in Unstable Economies

ESV Awolesi Abdul Olabisi,

In times of economic uncertainty, investors often seek refuge in assets that offer stability, security, and long-term value. Real estate consistently emerges as one of the most reliable options, especially in volatile economies like Nigeria’s. While stock markets fluctuate, currencies devalue, and commodities crash, property investments tend to retain and often increase their value over time. One key reason is the tangible nature of real estate. Unlike stocks or bonds, real estate is a physical asset. Regardless of market swings, land and property maintain intrinsic worth. People will always need places to live, work, and conduct business. This basic demand cushions real estate from the extreme volatility seen in other sectors.

Moreover, real estate provides a hedge against inflation. As the cost of goods and services rises, so does the value of property and rental income. In Nigeria, for instance, while inflation has soared above 30% in recent times, property values in key urban areas like Lagos, Abuja, and Port Harcourt have continued to appreciate. Investors who own rental properties often adjust rent to match inflation, ensuring steady income and preserving purchasing power.

Another factor is limited supply. Unlike currency, which can be printed, or stocks, which can be issued en masse, land is finite. In urban centers, the pressure of population growth and urbanization further restricts supply, pushing property values higher. The United Nations projects that Nigeria’s population will surpass 400 million by 2050. This rapid growth, coupled with rising urban migration, will likely drive continued demand for housing, commercial spaces, and industrial properties.

In addition, real estate offers portfolio diversification. In uncertain economies, financial advisors often recommend spreading investments across various asset classes. Real estate, particularly when combined with stocks, bonds, or commodities, can help balance risks. Its lower correlation with the stock market makes it an effective buffer during financial downturns.

Real estate’s potential for leveraging is also unmatched. Investors can acquire properties using mortgage financing or partnerships, allowing them to control high-value assets with relatively small capital outlays. Even in countries with high interest rates like Nigeria, many developers structure payment plans that spread costs over time, making investment accessible to a broader class of people.

Critics may argue that real estate is illiquid compared to stocks or cash. While this is true, the longer-term security it provides often outweighs the disadvantage of reduced liquidity. Besides, with the rise of real estate investment platforms and property co-ownership models, liquidity is gradually improving in the sector. Of course, real estate is not immune to risks. Poor location choices, legal disputes, or market downturns can affect profitability. However, with proper due diligence such as verifying land titles, researching market trends, and choosing strategic locations investors can mitigate these risks significantly.

In summary, while no investment is entirely risk-free, real estate stands out for its ability to preserve value, generate steady income, and offer security in unstable economies. Its historical resilience, tangible nature, and adaptability to market shifts make it a cornerstone for any investor seeking stability amid uncertainty. As global and local markets remain unpredictable, smart investors will continue to view real estate not just as a property, but as a safe harbor in stormy economic seas.

Awolesi, is a registered Estate Surveyor and Valuer.