Real Estate Sector Defies Economic Headwinds, Shows Strong Growth Amid Inflation Pressures

Nigeria’s real estate sector demonstrated notable resilience in the year under review despite persistent macroeconomic challenges, including high inflation and elevated interest rates, as rapid urbanisation, population growth and a massive housing deficit continued to drive demand, resulting in rising property prices, affordability pressures and renewed investor confidence across key markets.

Although figures on Nigeria’s housing shortfall vary, industry experts estimate the deficit at about 28 million housing units, with the country requiring no fewer than 700,000 new homes annually to bridge the gap, a reality that has sustained strong activity across residential, commercial and rental segments of the market.

Buoyed by the rebasing of the Gross Domestic Product (GDP) and Consumer Price Index (CPI), which saw real estate displace oil and gas to become Nigeria’s third-largest sector, the industry continued to expand, attaining an estimated value of $2.61 trillion, with real estate services recording a 46.52 per cent growth in nominal terms in the third quarter of 2024.

On a quarter-on-quarter basis, the sector recorded a growth rate of 16.15 per cent and contributed 5.43 per cent to real GDP in Q3 2024, slightly below the 5.58 per cent recorded in the corresponding period of 2023, reflecting both sustained growth and the pressures of a challenging economic environment.

Driven by rapid urbanisation in Lagos, Abuja and Port Harcourt, strong diaspora remittances, increased interest in short-let rentals, infrastructure expansion and a shift towards smart and sustainable housing, investors increasingly explored emerging corridors such as Ibeju-Lekki, Ibadan, Epe and parts of Ogun State in search of higher returns.

“The real estate market remained one of the most attractive investment destinations in 2025, supported by diaspora inflows estimated at $5.2 billion in Q4 alone, rising rental demand, growing interest in solar-powered estates and sustained acquisition volumes, even as inflation and high borrowing costs persisted,” industry analysts said.

“Despite strong demand and policy interventions, affordability challenges remained significant for average Nigerians due to rising construction costs, mortgage rates of 18–30 per cent and foreign exchange volatility, with many households turning to rentals as homeownership became increasingly difficult,” they added.

Government interventions under the Renewed Hope Agenda, including the construction of over 10,000 housing units across 14 states, the rollout of the Renewed Hope Cities and Estates programme, the launch of the Ministry of Finance Incorporated Real Estate Investment Fund (MREIF), expansion of Federal Mortgage Bank of Nigeria housing schemes and land administration reforms, provided momentum for long-term growth, even as inflation and high costs limited their immediate impact on widespread homeownership.