Despite the economic challenges in Nigeria’s real estate sector, a new report by one of the nation’s online platform- PropertyPro has revealed that the sector still retained its position as fifth contributor to the Gross Domestic Product (GDP)
The report, which is focused on the trends of the Nigerian real estate market in the year 2017 and the first quarter of 2018, analysed how impactful the economic recession was in the real estate market.
The 2018 first quarter report by the firm, a member of Tolet Property Group also featured studies of emerging real estate market in Nigeria as a whole, high lighting activity and performance.
It also looked at trends and going prices for properties within the residential and commercial umbrellas of the real estate market.
According to the report, the year 2017 saw the Nigerian economy come out of the recession that had plagued the country since the first quarter of 2016.
The real estate industry has been in the fifth largest contributor to the Nigerian economy and a potential goldmine for investors; but as the Nigerian economy grew, the real estate industry’s contribution to GDP dwindled.
The sector ended 2017 with a -5.92% contribution to the country’s GDP; a significant drop from the 3.1% recorded in the 1st quarter.
Experts attributed this to the restrictions placed on the availability of foreign exchange that affected the construction industry, which is heavily import based, and the unstable economic climate, which has affected the general willingness to invest in the country’s real estate sector.
But the report said Nigerian real estate market has grown since the emergence of online real estate sites in the late 2000s.
The market has grown more in states experiencing a high rate of urbanization.
With the Country’s 4.3% increase in yearly urbanization concentrated in only a few states of the country.
In the report, which narrowed down to the most performing areas on the Nigerian real estate scene with major focus placed on selected areas in Lagos and Abuja, including certain areas in Ogun state, Port Harcourt (Rivers state) and Ibadan (Oyo state), Lagos appeared the most active state on the Nigerian real estate scene and also maintains the most listings and leads across all major online real estate platforms.
This was largely due to the high level of urbanization in the state. Ikoyi has the most expensive properties in Lagos for both sales and rent. For sales, the average cost of a three-five bedroom house is as high as 308,000,000 while the lowest priced properties in Lagos are situated in the Alimosho axis with three and five bedroom houses going for N28, 000,000 on average.
The report also put Abuja as the second most active area on the real estate scene but stated that it still way behind in real estate activity compared to Lagos.
“We monitored the most searched types of properties by Nigerians along with the price range that fell with the interest of online real estate end users” said Seyi Ayeni, the Chief Technical Officer.
The Chief Operating Officer and co-founder, Oladapo Eludire, also noted that “real estate investment always require lots of funding and when dealing in such high risk investment, gut feeling isn’t enough in making the best decisions. Such decision needs to be backed up by data.