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Last year, when we launched the first edition of this report, we had an enthusiastic outlook on the Nigerian real estate market in 2023. Uncertainties in the global financial markets caused a slowdown in the real estate market. This was further exacerbated by the removal of fuel subsidies and the eventual floating of the naira by the Nigerian government. These factors caused inflation pressures that drove up property prices across the board. In light of these developments, the BuyLetLive 2023 Nigeria Property Price Index Report offers valuable insights into the dynamics of the real estate market, shedding light on key trends and fluctuations in property prices nationwide.
Property Price Index Report Summary
Looking back at 2023, one thing continues to stand out despite these headwinds, the sector continued to press forward. According to data from the Nigerian Bureau of Statistics, the real estate services sector contributed 5.58% to real GDP in Q3 2023 and 4.40% to the total real GDP and nominal GDP respectively, in the third quarter of 2023. Construction, on the other hand, contributed 3.36% and 8.43% to total real GDP and nominal GDP, respectively, in the third quarter of 2023. While 2022 numbers were higher, it shows growth relative to the first half of the year. We expect to see similar positives in 2024.
In terms of market performance across the various submarkets in 2023, there was an overall spike in property prices, with a double-digit increase in residential real estate prices across the country in 2023 asking prices compared to 2022. Lagos and Abuja had the highest increases, underpinned by rising costs of building materials, FX volatility, and operational costs. Since 2018, the commercial real estate market in Nigeria has continued to struggle, either due to oversupply, decreasing occupier pool or shrinking purchasing power of locales. This has been more pronounced in Lagos and Abuja, particularly in the market for large-scale prime retail and office projects.
Click here to download the 2023 Nigeria Property Price Index Report
2023 saw a further decline in activity in these segments. With a development pipeline that is more than 60% of the stock, investors, particularly in the retail market, have continued to favour a boutique-type strategy to manage occupancy. Operators within the office sector are becoming a lot more ingenious with their space allocation strategy to capture small-scale occupiers (100 sqm to 3000 sqm), who now constitute the majority of the occupier pool. The industrial sector across the country has remained undersupplied, with a burning need for warehouses and storage spaces across the country.
We warmly welcome you to this year’s edition and invite you to explore our research findings in more detail!
Click this link to download the 2023 Nigeria Property Price Index Report