Overpopulation and urbanization have led to a huge increase in Nigerian real estate development.
The Nigerian government has been unable to invest in the Nigerian real estate market due to the recent drop in global crude oil prices and corruption.
During the Nigerian boom of the 1970s, there was excess capital and the economic environment was favorable for real estate development, with exaggerated profit prospects and exaggerated growth rates.
According to the National Bureau of Statistics, this was the fastest growth in the second quarter since the Nigerian real estate sector grew by 4.95% in the second quarter of 2014.
However, driven by the reopening of the economy and increased interest in Nigeria, Nigeria’s real estate sector recorded a growth rate of 3.85% in the second quarter of 2021, according to the Business Day publication on September 6, 2021. The highest growth rate in six years.
Opportunities created by the COVID-19 pandemic have sparked optimism that the residential, construction and industrial segments of the real estate market will drive growth in the sector, while delivering strong returns for developers, investors, and landlords, according to the Nigeria Real Estate Report in the year 2021.
Overpopulation and urbanization
The World Population Review projections show that Nigeria’s population could hit 264 million by 2030 and cross 300 million around 2036.
This means that by 2050, there could be over 390 million total residents in Nigeria.
The UN-Habitat (2006), describes urbanization as the increased concentration of people in cities rather than in rural areas.
As a real estate investor, you can download and read a PDF Document Addressing Housing Deficit in Nigeria: Issues, Challenges, and Prospects written by Emmanuel Abolo Moore.
The Nigerian government has been unable to invest in the Nigerian real estate market
According to an article on The Guardian news website, “FG to build one million homes, pushes for 8.38% real estate GDP growth” Nigerians should be excited right? No. It’s the normal promise and failure pattern we are used to.
As much as we look forward to a better future for housing in Nigeria from the government, it is unlikely to happen because of corruption.
There are histories and cases of corruption in Nigeria documented on Wikipedia.
From Pre-Independence and the First Republic to Muhammadu Buhari’s administration (2015–present), we see many cases of corruption.
This has left a lot of gaps that can be filled by private real estate investors.
Wealthy Country People
The 2021 Africa Wealth Report released by South Africa-based AfrAsia Bank in collaboration with New World Wealth, also stated that by this record, Nigeria has the third highest number of wealthy individuals in Africa.
Let this not amaze you. There are very prominent and wealthy people in Nigeria. Even if you have a property valued at 500 million, there is someone in Nigeria that can purchase it.
It is important you understand that Nigerians have a culture that equates prominence to owning assets, especially real estate assets.
According to a Vanguard report, Nigeria is home to 9,100 dollar millionaires, worth $207bn.