The real estate sector in Nigeria has achieved a historic milestone, surpassing oil and gas to become the country’s third-largest industry, as revealed by ongoing GDP and CPI rebasing figures. This development underscores the sector’s growing influence and vast economic potential, with projections indicating the global real estate market will reach $2.61 trillion by 2025.
Behind only crop production and trade, the real estate industry has seen significant expansion despite economic challenges. In Q3 2024, the sector recorded a remarkable 46.52% nominal growth compared to the previous year, with a quarter-on-quarter increase of 16.15%. However, its contribution to real GDP dipped slightly to 5.43%, compared to 5.58% in Q3 2023.
Experts estimate Nigeria’s housing deficit at 28 million units, requiring 700,000 new homes annually. This shortfall, coupled with rising demand for luxury apartments in urban centers, positions the real estate sector as a critical driver of economic activity.
Global forecasts further highlight the sector’s potential. According to Statista, residential real estate will dominate, accounting for $2.25 trillion of the market by 2025. With a compound annual growth rate (CAGR) of 6.91%, the market is expected to reach $3.41 trillion by 2029, solidifying its role as a cornerstone of global economic growth.
The rebasing of Nigeria’s GDP and CPI, last conducted in 2014, is integral to understanding these shifts. The exercise incorporates previously unmeasured economic activities, such as digital economy innovations and modular refineries, reflecting modern realities. This recalibration is expected to enhance data accuracy, inform strategic policymaking, and pave the way for robust economic planning.
Adeyemi Adeniran, Statistician-General of the Federation, emphasized the significance of these updates, noting that a larger, restructured economy will positively impact key metrics such as the tax-to-GDP ratio and per capita income.
As Nigeria’s real estate market continues to grow, it stands as a beacon of opportunity, promising sustained growth and a transformative impact on the nation’s economic trajectory.
