The real estate sector in Nigeria has long been a major source of frustration for many investors and homebuyers.
Despite being a significant contributor to GDP and employment in several other countries, the sector in Nigeria has struggled to take off, contributing less than an average of 7 per cent to GDP and under 2 per cent to employment.
Then there are several reasons why the housing market in Nigeria may be poised for growth in the coming years. The Nigerian economy has been growing in the last few years, and this growth is expected to continue. As the economy grows in Nigeria, so does the demand for housing in 2023.
In fact, global housing market research firm Zillow predicts that “Nigerian home prices will rise over the next decade” (Zillow). The country’s population is also projected to grow by about 2 million people per year over the next 5 years (Zillow), meaning more people will be looking for homes.
The Nigerian government also has plans to build more than 100,000 new homes in a single year (Zillow), which will help keep up with demand.
Urbanization:
Nigeria’s urban population has grown at about 3% per year since 1990, and it’s predicted to continue for the next few decades.
This means that there will be more and more people living in cities—which means more demand for housing. As more and more young people move to cities in search of employment and a better quality of life, the demand for housing is likely to increase.
This trend is particularly pronounced in Nigeria, The urban population is forecasted to grow from 45 per cent in 2015 to over 60 per cent by 2030.
Population growth:
Nigeria’s gross domestic product per capita is growing at around 4% per year, according to the Nigeria Bureau of Statistics (NBS).
While this is not as rapid as population growth, it is still faster than income growth rates seen across most other countries in Africa, which means there will be plenty of money flowing into Nigeria to support new construction projects.
Nigeria’s population is also predicted to continue growing in the coming years, which will lead to an increased demand for housing.
The country’s population is expected to reach over 400 million by 2050, making it the third most populous country in the world.
Economic growth:
A strong economy can also drive demand for housing as people have more disposable income to invest in property.
Nigeria has experienced modest economic growth in recent years, and there are signs that this trend may continue in the coming years.
Infrastructure development:
Improved infrastructure, such as roads, airports, and public transport, can make it easier for people to access housing and drive demand.
Nigeria has made significant investments in infrastructure in the last 8 years, and this trend is expected to continue in the coming years.
Government policies:
Government policies and initiatives, such as affordable housing programs, can also drive demand for housing. The Nigerian government has made affordable housing a priority in recent years, and some initiatives have aimed at increasing the availability of affordable housing in the country.
Low mortgage rates:
Low mortgage rates make it more affordable for people to buy property, which can drive demand for housing.
The Central Bank of Nigeria has kept interest rates relatively low in recent years, which has helped to boost the housing market.
Increasing tourism:
A growing tourism industry can lead to increased demand for vacation rentals and other forms of housing.
Nigeria has a rich cultural heritage and several tourist attractions, and there has been a push to boost tourism in the country in recent years.
Ageing population:
As the population ages, the demand for senior housing and assisted living facilities may increase.
Nigeria has a relatively young population, though this is predicted to change in the coming years as the country’s population ages.
Changing lifestyle preferences:
Changing lifestyle preferences, such as the desire for more walkable communities or smaller living spaces, can drive demand for different housing types.
In Nigeria, there has been a shift towards more compact, efficient living spaces in recent years, particularly in urban areas.
Technological advancements:
Technological advancements, such as the growth of online real estate platforms and the increasing use of virtual and augmented reality in real estate, may make it easier for people to find and purchase housing, which could drive demand.
In Nigeria, there has been a significant increase in the use of technology in the real estate sector in recent years, and this trend is expected to continue in 2023.
While these are just a few potential factors that could influence the housing market in Nigeria in the coming years,
it’s important to note that the market’s specific trajectory will depend on various complex and interconnected factors.
Nonetheless, there are certainly some reasons to be optimistic about the future of the housing market in Nigeria.
