For the real estate sector of Nigerian economy, 2024 has not been a favourable one and this was amply reflected in the performance of the sector in the first half (H1) of the year. Though together with construction the sector contribute N11 trillion to GDP, according to recent figures released by the National Bureau of Statistics (NBS), players in the sector are quick to say that experiences have not been something to cheer about. As a sector that mirrors the economy more than anyone else, the pot-pouri of fiscal and monetary policies of the federal government are impacting negatively on the sector and its operators.
The central bank of Nigeria (CBN) has introduced a number of reforms aimed to stabilise the economy by controlling inflation, enhancing revenue collection, reducing budgetary deficits, managing public debt and stabilising the exchange rate. All these, unfortunately, have not been able to tame inflation. All through the first half of the year, inflation rates have been on the rise, peaking at 34.
19 percent in June, up from 33.94 percent in the previous month. This led to a decline in consumer purchasing power, and directly influenced the real estate market.
Inflation has increased construction costs, challenging project viability and reducing new developments. Building and construction materials costs hit the roof-top while labour cost also skyrocketed, all adding to house prices and even maintenance cost which unsettles the rental market and squeezes renters. In .