Going by the present surge in demand for luxury apartments in Nigerian city centres, industry analysts have said that the residential real estate would hit $2.08 trillion of the projected $2.42 trillion for the sector in 2025.
This was disclosed by the former President of the Nigerian Institution of Estate Surveyors and Valuers, Mr. Emeka Eleh, saying that the real estate sector would remain buoyant in 2025, adding that values (both sale and rental) have been increasing at an alarming rate.
Justifying his point, Eleh noted that the private sector operators have been investing massively in the sector, especially through Joint Ventures for real estate development, which contributed to elevate the sector to 3rd position in the Gross Domestic Products (GDP)’s chart behind agriculture and trade.
He said that the sector contributed as much as 5.20 percent of Nigeria’s GDP
In his presentation on the “2025 Budget and Real Estate Sector,” Eleh, who is the Principal Partner, Ubosi Eleh and Co., pointed out that between January 2024 and now, values have gone up by about 50- to 60 percent in most places driven by the combined effects of naira devaluation, fuel subsidy removal, consequent high inflationary trend, and general insecurity and the movement to the urban areas.
“The sector is growing, in spite of the government aided by the fact that real estate remains the asset class of choice and provided more stable investment option compared to shares and stocks,” he said
He added that the sector will continue to grow due to the nation’s huge informal sector, massive growth in Urban population across the country, which is now about 55 percent.
He explained that massive investment in infrastructure development by the government will create new neighbourhood, reduce the prices by spreading the demand and reduce the mass migration to the Urban areas.
Some good signs for the growth of the real estate sector in 2025, the expert said included the launch of the Ministry of Finance (MOFI) Real Estate Investment Fund of N250b designed to provide low-cost long-term mortgage financing of up to 25 years tenure
“MOFI is also in the process of unlocking a further N1trillion for investment in the sector,” he said
Eleh added that the gradual increase in land title issuance across the country was another good sign, noting that FCT alone issued about 5,481 Certificates of Occupancy between May 2023 and December 2024.
“Between 2010 & 2023 only about 8,400 were issued.
“The FMBN has raised a bankable guarantee of N100billion to finance off-takers of the N20,000 Renewed Hope Housing units,” he said
In addition, he explained that the Nigerian Mortgage Refinance Company (NMRC) had secured $228million funding from the United States International Development Finance Corporation to boost its refinancing capacity and enable more Nigerians to access affordable mortgages
He said that the fact that the government emphasised its reliance on the private sector to part finance its projects was a good sign for the sector.
Eleh is of the opinion that the upward movement of values will continue so long as the underlying factors remain the same.
“Hopefully as government economic policies take hold and the said underlying factors slow down or stabilise, we also expect values to plateau at some point,” he said
He encouraged people to continue to invest in the real estate sector now, saying “It remains the best investment outlet when compared to other sectors ond offers a better measure of stability, returns and store of value.
Eleh urged the government to pay more attention to addressing the regulatory and legal issues in the sector as well as creating the enabling environment for the private sector to operate.
“The private sector is able to meet the supply side while the government should concentrate more on stimulating demand through striving for economic growth and deepening of mortgage penetration in the economy,” the expert said.
Analysing the 2025 budget, he said that the allocation of N88 billion to the housing sector, describing it as “a tiny drop considering the need.”
According to him, even the N500billion annually canvased by stakeholders for the ministry still won’t solve the problem
Despite the low allocation to the ministry, the expert is of the opinion that expenditure in other key sectors as provided in the budget will benefit the real estate sector.
Talking about the expected expenditure of N14.85 trillion for capital projects, he said the above sum will increase to about N19.28 trillion when combined with the allocation to statutory transfers (CAPEX)
According to him, the proposed expenditure of N4.06 trillion for infrastructural works including many road projects like the Lagos-Calabar Coastal road; Lagos-Abuja
Superhighway and the Kebbi Super highway among others would benefit real estate.
“Some state governments are also making significant investments in both housing and infrastructure developments,” he said.
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