Despite the rising inflation, a massive infrastructure deficit, a shallow financial environment, policy inadequacy, and increasing exchange rate pressure in the currency market, housing industry experts are foreseeing abundant opportunities for real estate in 2025 and beyond.
The experts, who gathered during the UPDC Plc’s third Annual Real Estate Summit in Lagos, pointed out that amidst the odds, 2025 and beyond outlook for the real estate market is still promising.
“The industry continues to be resilient, and more investors are anticipated to hedge their resources against uncertainties, particularly inflation,” they said.
They observed that housing demand still remains high, attributing surge in demand for residential properties to population growth.
They also noted increased interest in commercial properties, especially in Lagos and Abuja as a result of growing middle-class and urbanisation.
“Nigeria’s residential real estate market is expected to reach an estimated $1.9 trillion by 2024
“Expected compound annual growth rate (CAGR) of 7.52% from 2024 to 2028 reaching US$3.02tn by 2028,” they said
However, the experts pointed out that the real estate market is still facing significant economic headwinds from inflation, currency fluctuations and the overall economic downturn.
To take advantage of the opportunities the situation presents, they urged operators/developers/investors to embrace technology focused on affordable housing; diversify investment portfolios; remain adaptable and build strong partnerships.
Themed: ”Current Economic Reforms and their Impact on Real Estate Sector,” the experts comprising the Managing Director, Financial Derivatives Company Ltd., Mr. Bismarck Rewane and Founder/Chief Consult, BAA Consult, Dr. Biodun Adedipe, also delved into ways to navigate the opportunities and challenges the reforms portend for industry’s key players.
They reeled out some of the challenges in the housing/real estate sector that needed to be addressed urgently.
Some of the challenges identified included soaring housing prices and widespread fake housing developers, inadequate training of personnel & poor skills, and poor quality building resulting in building collapses, noting that no fewer than 61 buildings collapsed across the country in 2022 alone.
Given the prevailing economic uncertainty in the country, they stated that reducing overreliance on imported construction materials would be essential to stabilizing the real estate sector, urging that most existing housing programmes should be upgraded
To help the real estate industry’s growth, they called on the government to promote development funding, preserve economic stability, and provide adequate infrastructure.
“The growth of the financial sector is essential to the real estate industry; expanding the number of mortgage financing institutions is vital,” they said.
In the area of real estate and housing business enabling environment, Rewane pointed out that out of 190 countries covered by the World Bank in its last survey, Nigeria performed poorly in terms of ease of doing business, registering property, and getting electricity compared to its pairs.
He noted that major structural constraints impeded the growth of housing and real estate.
Some of them, he mentioned, have to do with transferability problems, shallow financial sector, bureaucratic nature of the judiciary, shortages of building materials and skyrocketing prices, soaring land price and land fragmentation.
According to him, high interest rate is limiting mortgage demand.
Other constraints are inflationary pressure, geopolitical uncertainty, electricity, urbanisation, poor contract management skills, high price of imported products
Managing Director/CEO, UPDC PLC, Mr Odunayo Ojo, remarked that the real estate world is changing rapidly in terms of built environment, sustainability trends, regulations, and economic conditions, more because of happening around the globe and the new economic reform taking place in Nigeria.
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