Nigeria’s real estate market faces significant challenges, including high inflation, contentious compensation disputes, and frequent demolitions, all of which hinder its growth toward the projected $2.42 trillion valuation by the end of 2024.
Operators in the real estate sector have pointed out the considerable potential of the industry, but they stress that these economic and policy challenges are stifling growth.
Olufemi Oyedele, CEO of Fame Oyster & Co., explained that key reforms, such as the Central Bank of Nigeria’s decision to raise the base interest rate and the removal of the fuel subsidy, have impacted the cost of petroleum and building materials. These factors, along with controversial compensation disputes along the Lagos-Calabar coastal road, have created uncertainty in the market.
Oyedele further criticized the misinterpretation of Nigeria’s land tenure system, which he believes has reduced investor confidence, especially among the diaspora. The misalignment between government needs for land and the rights of individuals to own property is affecting the flow of investment into the real estate sector.
Estate surveyor Olorunyomi Alatise also highlighted the challenges posed by increased fuel costs, interest rates, and inadequate compensation for compulsory land acquisitions. These factors have slowed development and led to uncertainty, discouraging both local and foreign investment. Alatise believes that achieving the projected market value of ₦2.08 trillion by the end of 2024 is now uncertain, dependent on government policies and macroeconomic stability.
Statista had earlier forecasted the Nigerian real estate market to reach $2.42 trillion by 2024, with residential real estate making up the largest segment. However, ongoing economic instability and a lack of investor confidence could impact the sector’s growth trajectory.
Despite the current challenges, industry players remain hopeful that the market can adapt and eventually achieve its potential, provided there is greater policy alignment and improved investor trust.
