12 Feb Nigeria’s Real Estate Sector Surpasses Oil
In Nigeria, the real estate sector’s contribution as a part of total GDP has now surpassed that of oil at 7.2% in 2023. This now effectively makes real estate the third largest sector after crop production and trade. Data from the National Bureau of Statistics is pointing to this shift and that’s reflecting the ongoing diversification efforts in the country. The surge in property investment is being driven in part by relatively high returns but also a large housing deficit. Despite this fact, Nigeria still needs at least 20 million units to be built in the country and that deficit is seen at all income levels.
Spanning nearly 1,300 hectares on the outskirts of Abuja, Centenary City is one of Nigeria’s most ambitious development projects. Designed as a smart City, it incorporates green spaces, residential neighborhoods, commercial hubs and Industrial zones. Its first residential faze of 200 units is already halfway sold despite being unfinished, highlighting the high demand in Nigeria’s real estate markets.
Managing director Ike Michael Odenigwe attributes this demand to the country’s severe housing shortage and other key factors. “Where the demand is. it’s mostly residential. People need a place, a roof of over their heads. You’re talking about 20 million housing deficit. It’s all on the scale, low income, middle income, high income are all experiencing deficit” said Odenigwe.
From 2021 to 2023 real estate’s share in Nigeria’s GDP Rose from 5.85% to 7.2% overtaking the oil and gas sector, which dropped to 6.5% last year. Analysts see this as a critical moment in Nigeria’s economic diversification, pointing to real estate’s investment potential amid currency devaluation and inflation.
“First of all, a lot of people are seeing real estate as a way of store of value because of the devaluation of the currency. So rather than keeping your money in liquid cash, you put it in an asset that will hand you better returns. The property estate becomes an area of the economy that we must put a lot of attention into. It will grow the economy.
Despite this growth Nigeria faces a housing deficit exceeding 20 million units impacting all income levels. The low-income segment is the hardest hit, making up 60% of the shortfalls due to high property costs. Industry players argue that policy roadblocks remain a major hindrance.
Odenigwe said, “If the government recognizes the way you put policies in petroleum and oil and gas and all of that, that real estate sector has now become larger than these other places. So, you need to put focus there to promote policies that actually make it grow your economy bigger”.
Real estate is now Nigeria’s third largest economic sector trailing only agriculture and trade. While its rise boosts GDP, experts say its impact on human development is still limited. They emphasize the need for mortgage reforms, better access to housing finance and consistent policies to bridge the housing gap and sustain long-term growth.