The Nigerian real estate industry has experienced a slowdown in activities, including construction and transactions, over the past six months due to investor apathy and a wait-and-see attitude adopted by developers in response to the ongoing general elections. However, industry experts predict that the sector's performance will improve after the elections are over, as each of the top political parties has a relatively robust blueprint for housing and infrastructure. According to the Financial Derivatives Company (FDC), the sector's performance in 2023 is projected to expand by 5.2 percent, with a contribution to the Gross Domestic Product (GDP) estimated to increase to 6.5 percent, based on high population and urbanization growth. The sector's performance is expected to pick up in the second half of 2023, depending on who wins the election and their policies.
Despite opportunities in the construction sector, such as the federal government's highway development and management initiative (HDMI), there are several risks that could negatively impact the sector's growth. These include a high-interest rate environment, increased costs of building materials, poor land acquisition policy, and forfeiture orders on properties owned by politically exposed persons (PEPs).
Experts believe that the Central Bank of Nigeria's (CBN) new Naira Policy will have a positive effect on the real estate sector, as it will enable banks to have more than enough to lend to developers and homebuyers. However, there are concerns that the level of development expected in the sector will depend on the level of security in the country and the quality of the next managers of the economy. It is worth noting that capital and investment tend to flow towards safer havens, and even citizens might not invest in their own country if there are high levels of insecurity and poor governance.