Amid Nigeria’s housing shortage reaching 28 million in 2023, participants in the real estate industry are pressing the Federal Government to proclaim a state of emergency concerning building materials, identified as the primary obstacle to realizing affordable housing in Nigeria.

Given the absence of any imminent reduction in the prices of imported building materials, stakeholders are intensifying discussions on exploring local substitutes whenever feasible.

There is a strong push for empowering local manufacturers through financial support and other incentives to enhance their production capabilities, aiming to reduce Nigeria’s dependency on imported building materials in the long run.

Furthermore, there is a growing demand for the government to introduce policies mandating the use of accessible and certified locally-sourced building materials by Nigerians.

Some major local building materials available in Nigeria such as adobe, bamboo, are not harnessed on a large scale despite the fact that they are reliable, yet cheaper compared to imported materials.

As a panacea to the troubling housing deficit challenge, operators have tasked the government to build more houses, preferably at all price points. A real estate developer, Mr. Ambrose Osilama, said there are opportunities available for high-quality properties that meet the needs of today’s investors, urging firms to learn to adapt their growth strategies to succeed.

Osilama noted that last year, most real estate operators strategised 2024 with high hopes, believing they would ride out current risks and reposition the sector for sustained growth and improved returns. According to him, “There is a reluctant acceptance in the industry that interest rates will remain high. Despite available equity, transactions are down and many in the industry point to instances where buyers and sellers simply cannot agree on pricing because the dearth of sales limits price clarity. Most developers are not liquid enough to develop more estates, thereby creating an artificial rise in the available ones. On a positive note, respondents to this year’s Emerging Trends survey, believe the worst of inflation is behind us, which should give the government a reason to pause interest rate hikes and do something to the rising cost of building materials. I believe that since they can act on the exchange rate to get to N1,235/$, the building material issue will be a minor problem.”

Managing Director, PWAN Real Estate, Mr. Emeka Anyiam, said that Nigeria’s population is projected to surpass 300 million by 2050, making it the third most populous country globally. This rapid population growth, he said, will continue to fuel demand for housing, commercial spaces and infrastructure development. He said as more people migrate to cities in search of better oppourtunities, the need for affordable housing and mixed-use developments will escalate, presenting a vast market for real estate developers. He said one of the critical challenges in Nigeria’s real estate sector has been the issue of affordability.

“Collaborations between developers and financial institutions are enabling the implementation of innovative financing models such as mortgage schemes, rent-to-own programs, and cooperative housing societies. These efforts aim to increase access to affordable housing, especially for the middle and lower-income segments of the population. Technology is set to play a transformative role in the Nigerian real estate industry. With the rise of digital platforms, property listing websites and online marketplaces, the process of property search, transactions, and documentation is becoming more streamlined and transparent. Virtual reality (VR) tours and Augmented Reality (AR) applications are enabling potential buyers and investors to explore properties remotely, reducing the need for physical visits. Additionally, the adoption of smart home technologies and energy-efficient solutions will enhance the overall value and appeal for properties in the future.”

Ayorinde Ejioye, the co-founder and Chief Operating Officer of Gidi Real Estate, highlighted the industry’s notable expansion and transformation, presenting fresh prospects alongside emerging challenges. He remarked, "As we enter 2024, the landscape will become more dynamic, particularly with the continuous influx and dominance of government regulations intended to oversee the sector. Hence, it is crucial to outline the anticipated real estate trends of 2024 to assist stakeholders in navigating the path of real estate development and investment in Nigeria."

“The economic state of Nigeria and how it impacts the real estate sector has remained on the front burner for many analysts and commentators. Nigeria’s real estate market has been characterised by unprecedented growth which is driven by the country’s urbanisation and growing real investment, with Lagos, Abuja, Rivers and Anambra as the destinations.

Despite the benefits it offers, the real estate sector also faces numerous challenges such as property scarcity, significant disparities between the middle and lower classes, infrastructural and housing shortages, political instability, community relations with host communities, and government policies, among other issues.

“Overall, the industry looks to continue from the developmental pace of 2023. Government policies have been instrumental in the industry’s development over time but this has been limited by several factors including host community settlement, funding, political instability, governmental bureaucracy amongst others. Also, there have been numerous efforts to encourage more private sector involvement in the industry and introduce new reforms.

“For instance, in Lagos, developers are now mandated to register with the Lagos State Real Estate Regulatory Authority (LASRERA) and eschew the development of untitled lands. In the same vein, marketers are now required to compulsorily register with the agency to enable them to practice real estate marketing as licensed realtors. While this is a commendable effort, as it raises the bar against fraudsters in the industry, it also poses a challenge to the bureaucratic process of land documentation, which may result in another scam that it is supposed to curb. In all, it is expected that this will aid fair play in the industry by regulating the industry’s terms of practice, reducing fraudulent practices, facilitating stakeholder-government engagement, and creating access to government funds, which will in turn, develop the industry in the long term. Other states are expected to follow through, in no distant time.

“It is likely that the challenges that the problems of this policy pose will not last the test of time, because according to the permanent secretary of Lagos State Land Bureau in 2023, the government is gearing towards the digitization of acquisitions of land in the estate. What this means is that the bureaucracy of acquiring and authenticating the status of lands in the state will reduce, just being scammed will. This will also affect the industry as a whole, by improving processes that would have been difficult pre-emergence of technological incorporation in the industry.

“In the end, Nigeria’s real estate is bound to experience growth in 2024, which is all thanks to the profitability of the industry, the government’s growing presence and foreign investment. This, however, will be limited by scarcity, economic fluctuation, and policy development of which regulating reforms is an ongoing issue and the political will of the government to declare emergency in local building materials in the country.”