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Current economic conditions affecting the sector’s progress, according to real estate experts in the country
November 21, 2024 | Staff Reporter | Nigeria | Property Management
Current economic challenges, including high inflation rate, controversial compensation payments and incessant building demolitions have been adduced among factors why Nigeria’s real estate market won’t achieve the predicted value of $2.42 trillion by end of 2024. According to experts, the current economic conditions in Nigeria have become a major concern, making it difficult for businesses to operate.
The experts, comprising the Immediate Past President, Nigerian Institution of Estate Surveyors and Valuers (NIESV), Johnbull Amayaevbo; Lagos-based real estate consultant, Femi Oyedele; and former Chairman NIESV, Lagos chapter, Samuel Ukpong, pointed out that the pace of completion of ongoing projects has not been encouraging due to harsh economy.
They added that people are now more concerned about food than completing their building projects. Besides, they emphasised that the incessant demolition of houses in Abuja and Lagos discouraged real estate investment in Nigeria. “Nigeria is number six in the real estate investment index from number three which it used to be,” one of the experts said.
To encourage investors at this particular period, they cautioned that demolition must stop and due process followed before demolition. Nigeria’s real estate market size was valued at $91.1 million in 2023, and is predicted to reach $137.8 million by 2030, at a compound annual growth rate. In Nigeria, Statista Market Forecast, a global data and business intelligence platform with an extensive collection of statistics, reports and insights, had it that the real estate market was anticipated to achieve a value of $2.42trillion by 2024.
Among the various segments within the market, it stated that residential real estate holds the largest share, with a projected market volume of $2.08 trillion by 2024. “Over the period of 2024-2029, the market is expected to exhibit a compound annual growth rate (CAGR) of 7.10 percent, resulting in a market volume of $3.41trillion by 2029,” it said, adding that the real estate market in Nigeria has been experiencing a surge in demand for luxury apartments in major cities.
The value of the Nigerian naira has been volatile in recent years, making it difficult for businesses to operate.
Johnbull Amayaevbo, Real Estate Consultant
Looking at the prediction and current realities, Johnbull Amayaevbo, said it’s highly unlikely that the Nigerian real estate market will reach the predicted value of $2.42 trillion by the end of 2024. “The current economic condition in Nigeria is a major concern. The country is facing a number of economic challenges, including high inflation rate. “Moreover, the value of the Nigerian naira has been volatile in recent years, making it difficult for businesses to operate,” he said. According to him, these economic challenges would likely have a negative impact on the real estate market, making it even more unlikely that the market will reach a predicted value by 2024. Oyedele said the value of the Nigerian real estate market would be a little bit short of the predicted one. “The controversial compensation payment and the incessant building demolition didn’t help the market,” he said.
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