Amongst a myriad of other challenges hindering the growth of Nigeria’s real estate sector which include high costs of property development, Naira devaluation, taxation, limited sources of funding, omo-onile issues, and liquidity, Real estate consultant and CEO, First Bukola Solanke Consultancy Services, Rotimi Adesoye has shared that Nigeria is yet to explore up to 30% of its real estate capabilities and offerings.
In 2018, reports from PropertyPro revealed that the real estate sector remains the fifth biggest contributor to Nigeria’s GDP and for the past two decades, Nigeria has also maintained its position as the country with the most Real Estate investment on the African continent. However, the real estate sector is still largely decided and controlled by the government, which undermines its growth and development in the global economy.
In an interview with Homes and Property Guide, Mr. Adesoye explained that the potentials of Nigeria’s real estate market is yet to be fully tapped. Only a small number of Nigerian developers have the capacity for large-scale delivery of houses.
In his words: “Nigeria’s real estate market is a growing sector in the economy of Nigeria, it is yet to be fully tapped, and this is because it is still basically controlled by the government because landed properties are still majorly controlled by the government. If you take a look at some of the developed countries such as the US, you would see that a lot of private organisations are the major players in their real estate market. These people understand what it means to have acres of lands and estates, whereas what we still have here is people buying their plots of land just to have a roof over their head. So we have a whole lot that still needs to be tapped. Nigeria is yet to achieve up to 30% of what can be achieved in the real estate market. We are yet to explore all the opportunities that are available to us in Nigeria.”
Nigeria possesses all the key factors for real estate investment — a growing middle-class population, growth in consumption, rapid urbanization and a young demographic compared to more mature economies. Meanwhile, another problem which has been identified is that most Nigerian cities are overpriced, which discourages potential investors. Rivers, Lagos, and Abuja are the most affected cities, all of which are important commercial hubs.