Why Real Estate Will Boom This Year

• Real Estate Players Reveal

Despite the bad economy and Naira fluctuation, key stakeholders and players in the real estate sector have expressed and projected bright future for real estate in 2024, going by the available calculations.

At the recently held West African Property Investment, WAPI summit, organised by African Property Investment, API, in Lagos, a few weeks ago, experts in the real estate sector expressed optimism.

Mr. Oladapo Runsewe, who was one of the speakers, noted that 2024 was going to be a balanced year for the industry.

He said: “I think in 2024, things might ease up a bit because if we look at the statistics from the Nigerian Bureau of Statistics, NBS, the real construction sector contribution to GDP actually increased in the last quarter.

“So, if we just continue on that positive path, I can foresee that we’re going to have a balanced positive effect on the market.

“I will say it’s going to be positive and there’s nothing pointing that it’s going to be negative because construction must go on, development must go on regardless of whatever situation. People need houses to live, investors need real estate to invest in. So it’s going to be balanced.”

However, Runsewe noted that, “There is a need for collaboration between construction industry participants and the government like the public and the private sector players collaborating to move the sector forward.

Also, Head, Real Estate Finance, Stanbic IBTC, Mr. Tola Akinhanmi commented on the resilience of the sector despite the economic challenges.

A few weeks back, popular Lagos firm, Denaro Property’s MD, Babajide Ogunleye, noted in his address at their end-of-the-year get-together recently that the reforms that the new administration has introduced are expected to yield positive results, beginning from the new year.

“The election season is over and reforms like the removal of subsidy, and the stability of the naira through the efforts of the Central Bank of Nigeria (CBN) will make next year better,” he said.

President Bola Tinubu, removed the controversial fuel subsidy on the day of his inauguration in May. Prior to this, the last administration had spent over N11 trillion to keep the subsidy standing but said it was no longer sustainable.

Tinubu’s administration also floated the naira to close the disparity in the official and parallel markets.

In addition, she said the rising cost of materials and inflation dented some of the targets set for this year but, “we’re optimistic that next year will be better and everything will be stable.

The former Chairman, NIESV’s Faculty of Estate Agency and Marketing, Mr. Sam Eboigbe, in another seminar a few days ago, expects that with the elections and all litigations over and a new regime in place, the real estate sector will perform much better in 2024.

“However, it does seem that the first quarter 2024 may not be totally different from the performance of the sector as witnessed in 2023. The reason is that the trajectory for economic growth, which is the main driver of activities in the sector, may require time for stakeholders to have an acceptable level of confidence.

“The economy, as it relates to inflation, exchange rate, prices of building materials, government regulations, budget, and expenditure patterns, will be closely monitored by the investors to make informed decisions. The efforts of the government to convince the international community and investors to invest in Nigeria are quite strategic and would positively influence the performance of the economy,” he said.

Eboigbe, a fellow of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) said the government is expecting the economy to grow by a minimum of 3.76 per cent. “With impressive economic performance, income levels will rise with increased demand for housing in all segments of the market. Things may likely get better during the second quarter, as investors will leverage on the available robust market triggered by increasing population, urbanisation, and economic reforms to increase supply chain.

“The exchange rate factor is also key as this invariably will have a multiplier effect in the prices of certain building components in the marketplace. In highbrow locations, prices of different segments of properties will adjust with realities in this market, taking cognisance of what the naira is being exchanged for the dollar. All things being equal, since a healthy economy is the main catalyst for robust activities in the sector, the present administration would do well to keep the momentum.”he said.