Business
Survey Reveals Slow Growth In Real Estate Sector
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A survey report has indicated that the real estate sector will witness a tremendous slow growth, as a consequence of the present economic challenges in Nigeria.
The report, carried out by a real estate company, Ubosi Eleh and Co, obtained on Monday, predicted that the housing sector will witness slow growth throughout the rest of 2023.
According to the report, the sector’s slow growth is linked to high inflation, poor regulations, and macroeconomic challenges facing the country’s economy.
”Lagos and Abuja had benefitted most, in terms of real estate investment driven by the high level of insecurity in the country and this trend would continue.
“Ideally, the demand for medium-sized retail space for shopping complexes, shopping centres, corner and neighbourhood shops would be positive and high.
“The real estate market would witness slow growth all year with a chance of a rebound in 2024, depending on the state of the economy”, it stated.
The report also said the country’s underdeveloped Real Estate Investment Trusts (REIT) Industry had caused the low rate of homeownership in Nigeria.
It said the Nigerian REIT began in 2007, about six years before REITs began in South Africa in 2013 and about five years after REIT began in Singapore in 2002.
According to market experts, Nigeria’s REIT is worth $0.2bn, compared to the UK’s $73bn, Singapore’s $34bn, and South Africa’s $19bn.
It added that Nigeria had a seven per cent return on investment compared to Singapore’s 16 per cent, South Africa’s 15 per cent, and Kenya’s nine per cent.
“The low rate of homeownership in Nigeria is also attributed to the country’s underdeveloped Real Estate Investment Trusts (REIT) Industry, which tags in terms of investment volume, market capitalisation, and returns on investment.
“Inspite of this outlook, it would still be maintained that the industry remains the asset class of choice in Nigeria”, the report stated.
By: Corlins Walter
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