The real estate sector experienced subdued growth in 2024, with GDP growth rates of 0.84 percent in Q1, 0.75 percent in Q2, and 0.68 percent in Q3, according to a recent report by BuyLetLive.
These figures fell below the national GDP growth rates, highlighting the sector’s ongoing challenges despite its critical economic role.
The report emphasised the resilience of the real estate service sector, which contributed a robust 5.20 percent in Q1, 5.17 percent in Q2, and 5.43 percent in Q3 to the GDP highlighting the sector’s importance in driving urbanisation, employment, and wealth creation, even amidst slower overall growth.
In contrast, the construction sector demonstrated a stronger recovery. After a contraction of 2.14 percent in Q1, it rebounded with growth rates of 1.05 percent in Q2 and 2.91 percent in Q3. This was attributed to increased public infrastructure spending, private investments, and rising demand for residential and commercial properties.
The report identified key obstacles affecting the real estate sector’s growth. Inflationary pressures and high interest rates have weakened purchasing power, reducing property demand. Regulatory issues, such as delays in land titling and high transaction costs, further stifled progress. A lack of a unified housing policy and a persistent demand-supply mismatch have exacerbated the sector’s struggles.
It said high construction costs, limited land access, and inadequate financing options were significant barriers, and the absence of affordable mortgage systems has hampered residential real estate growth, leaving a gap in the market.
Despite these challenges, the sector remains rife with potential. The construction sector’s growth offers direct opportunities for real estate development, particularly in urban hubs like Lagos, Abuja, and Port Harcourt. Public-private partnerships aimed at addressing affordable housing deficits could unlock substantial market potential.
It said “The adoption of technology and innovation is another growth avenue. Proptech solutions, such as digital platforms for property transactions, smart home technologies, and data-driven insights, are increasing efficiencies and bolstering investor confidence.”
“A growing focus on sustainability is reshaping the industry, with green building practices gaining momentum. These environmentally conscious approaches not only attract buyers but also position the sector for long-term relevance,” the report disclosed.
The report called on policymakers to streamline regulations, simplify land titling, and invest in supportive infrastructure. Developers were urged to adopt innovative construction methods and target emerging markets to mitigate rising costs. Investors were encouraged to leverage data-driven insights and diversify portfolios across residential, commercial, and industrial segments.
For consumers, affordable housing initiatives and green building technologies offer promising opportunities, but transparency in pricing and financing remains essential to improving accessibility.
“While persistent economic volatility and high material costs continue to strain the industry, addressing these challenges could unlock the real estate sector’s full potential and solidify its role as a cornerstone of Nigeria’s economic growth,” it said.
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