Nigeria’s Real estate sector Grows to ₦41.3tn, Driving Economic Expansion

Nigeria’s real estate sector has witnessed a remarkable upturn, surging to a market value of ₦41.3 trillion in the first quarter of 2025, according to recent data from the National Bureau of Statistics (NBS). This expansion not only underscores the sector’s resilience amid economic headwinds but also highlights its increasingly pivotal role in national economic recovery and growth.

The sector’s performance, which represents a significant jump compared to previous quarters, is being lauded by industry experts and economic analysts alike, especially as it comes at a time when other major non-oil sectors such as trade and manufacturing have posted mixed results.

According to the NBS report, real estate contributed about 6.5% to Nigeria’s Gross Domestic Product (GDP) in Q1 2025, reinforcing its role as one of the country’s top five non-oil revenue generators. This is despite the challenges posed by inflationary pressures, high interest rates, and rising construction costs, which continue to affect other sectors.

Analysts attribute the sector’s steady growth to increased urban development, renewed investor confidence, and a growing middle class with heightened interest in residential and commercial property investments. In particular, key urban centres such as Lagos, Abuja, and Port Harcourt have seen a spike in property values, land acquisition, and construction activity.

Commenting on the growth, Dr. Tosin Ogunlade, a real estate economist, stated: “Despite macroeconomic challenges, real estate remains one of the safest asset classes in Nigeria. With limited foreign exchange exposure and rising demand for housing, the sector has managed to hold its ground and even grow.”

He added that the boom in property development, especially within gated communities and mixed-use developments, has attracted both domestic and diaspora investors who see real estate as a hedge against currency volatility and inflation.

Developers are also increasingly turning to alternative financing options, such as Real Estate Investment Trusts (REITs) and joint ventures, to bypass the limitations of commercial lending, which has become more expensive due to elevated Monetary Policy Rates (MPR).

Additionally, public-private partnerships have been instrumental in expanding access to affordable housing schemes and infrastructure-linked developments. The Federal Government’s ongoing Urban and Regional Planning Framework and the National Housing Programme are also feeding into the sector’s momentum.

“Government support through regulatory reform, land digitisation, and policy initiatives aimed at reducing bottlenecks in land titling have also contributed to investor confidence,” said Mr. Nuhu Ali, a policy analyst with the Centre for Urban Development Studies.

Despite the positive indicators, the sector is not without its challenges. Developers continue to grapple with fluctuating building material costs, bureaucratic delays in land registration, and the burden of multiple taxation, particularly at the state and local government levels.

Inflation, which hovers above 22% as of mid-2025, has also impacted affordability, with the average cost of middle-income housing rising by 18% year-on-year. This has put pressure on consumers and limited the purchasing power of first-time home buyers.

However, industry players believe the long-term outlook remains optimistic. Recent shifts in government housing policy, including incentives for green buildings and digitised property registration, are expected to further deepen sectoral gains.

Moreover, the influx of diaspora remittances into real estate—estimated to contribute over $3.5 billion annually—has provided a stable stream of funding that has shielded the industry from some of the volatility affecting other parts of the economy.

The growing popularity of proptech (property technology) solutions has also helped to streamline property transactions, enabling developers and agents to reach buyers more efficiently and transparently. Platforms that offer virtual tours, online documentation, and digital payments are becoming more common, especially among younger investors.

“We are seeing a real digital shift in the sector,” said Chioma Onyekachi, CEO of a Lagos-based real estate firm. “Millennials and Gen Z investors want speed, convenience, and transparency. The firms that are adapting to these needs are capturing more market share.”

As Nigeria continues to urbanise rapidly—with over 50% of its population projected to live in cities by 2030—the demand for both residential and commercial spaces is expected to grow in tandem. Experts argue that unless government and private stakeholders address the structural constraints facing the industry, the sector may struggle to sustain its current trajectory.

Nonetheless, the real estate sector’s current value of ₦41.3 trillion positions it as a key growth engine within the Nigerian economy, offering job creation, investment opportunities, and long-term stability. The sector now employs millions, from architects and civil engineers to artisans and agents, contributing not just to GDP but also to the nation’s social infrastructure.

 

In summary, while the sector must navigate a complex web of challenges ranging from affordability gaps to bureaucratic red tape, its recent performance signals strong resilience and growing investor confidence. With continued policy support and innovation, Nigeria’s real estate market is poised to remain a cornerstone of economic transformation.