Expect sustained growth in the real estate sector in 2023

The analysts listed a high-interest rate environment, rising building material costs, unfavorable land acquisition policies, and forfeiture orders on properties held by politically vulnerable individuals as the sector’s top risks for 2023.
Experts and analysts believe that the forecast for the real estate industry in 2023 is positive based on the results of the first three quarters of last year.

Experts predict that the real estate sector will continue to grow in 2023 because it has already added more than N7 trillion to the country’s Gross Domestic Product (GDP) and that investors now have more confidence in the sector as a result of the number of housing schemes that were started in the third and fourth quarters of 2022.
They said that regardless of whether the party wins the upcoming elections, the real estate market will fare better than in 2022.
Real estate will increase by 5.2% in 2023, according to experts/analysts at the Bismarck Rewane-led Financial Derivatives Company (FDC), which foresees ongoing expansion in the sector.

Due to rapid urbanization and population expansion, they also stated that real estate’s contribution to the GDP will rise to 6.5% in the coming year.
According to the experts, the industry would face significant risks in 2023 from a high-interest rate environment, rising building material costs, ineffective land acquisition policies, and forfeiture orders on properties owned by those with political links.
Speaking of prospects, they predicted that the construction industry’s contribution to GDP would reach 9.2% as a result of increased expenditure and investments in road infrastructure, adding that the Nigerian government had already granted concessions for 12 federal roads.

The initiatives started by the prior government, however, may be shelved, they warned.
The Central Bank of Nigeria’s (CBN new)’s currency policy and naira notes, according to Fame Oyster and Co.’s managing director and CEO, Mr. Femi Oyedele, indicate that the prognosis for real estate in the next year is positive.

He claims that because it is an election year, the CBN’s decision to alter the color of the naira notes, as well as its policy on the maximum cash withdrawals, Nigerians who had a propensity of hoarding cash and who earned more money than was actually in use have been pushed into a corner.

“Now that there is enough money in the banks, they will have enough cash on hand and money to lend out. As the time of holding cash at home and offices comes to an end, more individuals will be interested in housing products as investment vehicles, he said.
The real estate sector is expected to perform better in 2023 than it did in 2022, according to Oyedele, a practicing estate surveyor and valuer. She noted that this is because Nigerian election years are typically the best-performing years, and she added that the sector would experience tremendous growth.

Oyedele encouraged President Muhammadu Buhari to sign the National Building Code (NBC) regarding significant improvements that should take place in the sector in the next year, adding that the country would require a committee to develop a “National Affordable Housing Policy.”
He asserted that it was now necessary to minimize the use of foreign materials in building construction to cut costs.
“We need to standardize our sandcrete blocks and promote the usage of bricks. We need to use less cement overall, but especially for walls and pavement.
As there are many vacant homes, he claimed, “our residences are not economically allocated.”

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