Ibadan – Findings have shown that real estate has displaced oil and gas as Nigeria’s third largest sector.
This is according to early numbers from the ongoing Gross Domestic Product (GDP) and Consumer Price Index (CPI) rebasing.
It comes behind crop production and trade which are now Nigeria’s biggest and second biggest sectors respectively.
It is common knowledge that Agriculture had been Nigeria’s biggest sector before now, contributing over 20 percent to the nation’s GDP with subsectors such as crop production, livestock, forestry, and fishing.
Now, crop production has been divorced from agriculture and has emerged the nation’s second largest industry. Agriculture contributed 28.65 percent to overall GDP in the third quarter (Q3) of 2024.
Also, Telecommunications, which was infused into information and communication, has become a standalone sector and now the fourth largest sector. In the Q3 of 2024, information and communication contributed 16.35 percent to the GDP.
Trade, now Nigeria’s second largest, contributed 14.78 percent to the GDP in Q3 of 2024.
In the new rebased GDP, crude petroleum and natural gas, construction, food beverages and tobacco are fifth, sixth and seventh largest sectors in Nigeria. Public administration has been totally displaced from the top seven.
Real estate services grew by 46.52 percent in the Q3 of 2024, higher by 43.70 percent points than the growth rate reported for the same period in 2023 and lower when compared to the preceding quarter.
On a quarter-on-quarter, the sector growth rate was 16.15 percent. It contributed 5.43 percent to real GDP in Q3 of 2024, lower than the 5.58 percent recorded in the corresponding quarter of 2023.
Despite the declining purchasing power, there is a growing demand for Nigeria’s real estate.
Though there are conflicting figures regarding Nigeria’s housing deficit, several real estate experts estimate the gap at 28 million units, stating that the nation needs 700,000 new homes annually.
The real estate market is anticipated to achieve a value of $2.61 trillion by 2025, Statista says, showing that the sector has huge potential.
“Among the various segments within the market, residential real estate holds the largest share, with a projected market volume of $2.25tn by 2025,” Statista says.
“Over the period of 2025-2029, the market is expected to exhibit a compound annual growth rate (CAGR) of 6.91 percent, resulting in a market volume of $3.41tn by 2029. When compared globally, the United States is projected to generate the highest value in the Real Estate market sector, amounting to $136.6tn in 2025.
“The real estate market in Nigeria is experiencing a surge in demand for luxury apartments in major cities.”
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