Despite economic headwinds and challenges with obtaining building permits, experts predict that the demand for housing will remain strong, and the market will see a steady increase in property values this year.
There are also opportunities available for high-quality properties that meet the needs of investors and tenants, while low mortgage rates and government incentives will likely contribute to this optimistic outlook as inflation may remain a concern in 2024, affecting both home prices and mortgage rates.
The Guardian gathered that one of the key factors that will shape the real estate market in 2024 is technology, as virtual reality property tours, blockchain in real estate transactions, and Artificial Intelligence (AI)-driven market analysis tools will make the buying and selling process more efficient and accessible.
Besides, with high demand and limited supply, sellers can anticipate competitive offers and faster sales. They anticipate primary markets becoming more competitive and expensive, secondary markets offering attractive opportunities for buyers and investors looking for affordable properties.
It is expected that cities and other states’ capitals without many security challenges will witness refinements. Many urban centres will witness positive changes in real estate, but the most prominent among them are Lagos, being the economic hub of the country; Abuja- the political heart of Nigeria; Port Harcourt- the oil and gas industry; Ibadan as a growing metropolis; Abeokuta being the emerging economic centre; Uyo as a blossoming urban centre; and Kano metropolis.
The former Chairman, NIESV’s Faculty of Estate Agency and Marketing, Mr. Sam Eboigbe, 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 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 regime would do well to keep the momentum.”
Consequently, the government is expected to fix the economy as everything in the real estate sector revolves around the economy. He advised that the mortgage and other primary lending institutions should be strengthened to perform their obligations in making loans available to the people, adding, “The Land Use Act has been identified as posing obstacles towards the development of the sector. The identified sections should be amended accordingly.”
While calling on the Federal Government to intervene in the issue of banditry and criminality, as it will have adverse effects on the development of the sector by discouraging local and foreign investors, he urged the government to adequately fund research institutions to play valuable roles in collective quest to depend less on imported building materials.
The Director, School of Environmental Studies, Moshood Abiola Polytechnic (MAPOLY), Dr. Samson Agbato, said the real estate market will continue to experience strong growth. “This growth is being driven by several factors, including rapid urbanisation, population growth, government spending, and foreign investment. Nigeria is one of the fastest urbanising countries in the world. The urban population is expected to reach 300 million by 2050.
“Despite the harsh economy through removal of oil subsidy and unification of exchange rate, the real estate sector is projected to stablise this year. Real estate sector has been resilient despite the harsh economic reality in 2023. Therefore, the sector is going to be positive because construction and development must go on to meet demand.
“People will continue to need houses to live; investors need real estate to invest in. Considering the budget for the year 2024 and the courage of the Federal Government to improve on the infrastructure in the country, sales and prices of real estate are expected to be on the rise.”
He noted that the residential property market will perform better this year. “Nigeria’s growing population and urbanisation are driving demand for residential properties. This includes blocks of flats, terraces, apartments, houses, and condominiums. Others are the retail market and warehouses, hospitality, and land market,” he said.
Agbato, an estate surveyor and valuer, advocates increased government investment in infrastructure, which will make it easier to develop and maintain real estate projects and make Nigeria a more attractive destination for foreign investment.
He further called on the government to address the challenge of land title disputes by improving the land registration system. “Federal Government should compel all 36 states and FCT to have full cadastral in their land administration system. This will make it easier for investors to purchase and develop land, and it will also reduce the risk of fraud.
“The government can also play a role in addressing the shortage of affordable housing by providing subsidies and incentives to developers to build affordable housing. This will make it easier for people to purchase homes and boost the economy. Therefore, the government should intensify efforts in the Public Private Partnership initiative to boost affordable housing delivery.”
Agbato wants the government to support mortgage accessibility and financing options as access to financing has traditionally been a challenge for many prospective property buyers, as well as improve mortgage accessibility and provide alternative financing options.
According to him, the real estate sector in 2024 presents a world of opportunities for those who are well informed and prepared. “With the right knowledge, a solid strategy, and a bit of patience, it is possible to unlock the full potential of this growing market,” he added.
For the former president, International Real Estate Federation (FIABCI) Nigeria, Kola Akomolede, the real estate sector will continue to experience a boom as the economy continues to recover. “Prices will rise in line with inflation due to the exchange rate. Lagos and Abuja will witness upward demand for properties and with the increasing confidence in the government at the Federal level, foreign investors are expected to come back,” he said.
He said that residential properties will continue to have increased demand as the population increases due to births and migration. “The more you have new businesses opened in the cities; the demand for housing will continue to increase. The lower- and middle-class accommodations will feel the impact more. This is because investors seem to concentrate more on the higher class because it is more profitable and guarantees security of capital and income.
Akomolede urged the government to take a more serious look at the ease of doing business in the country.
A former president, International Right of Ways (IRWA) Nigeria, Dr. Emmanuel Mark, who said the hotel industry, will face competition from alternative lodging sources due to slower economy, predicts that technology will revolutionise the market and continue to bring significant changes to real estate sector in 2024, and in years to come.
“The effect of technology on the real estate market in Nigeria cannot be overemphasized. With the help of technology, real estate professionals will be able to streamline their operations, enhance their customer experience, and offer more efficient services.
“Another trend to watch in the Nigerian market in 2024 is the use of virtual reality (VR) and augmented reality (AR) technologies. These technologies allow potential buyers to view properties remotely and in real time. With VR technology, potential buyers can take a virtual tour of a property and experience it as if they were physically present. On the other hand, AR technology allows buyers to see a property’s potential by overlaying digital images of furniture or design features onto real-world spaces.
Mark, a fellow of the institution, said real estate professionals will continue to embrace technology, as “we expect to see more efficient operations, enhanced customer experiences, and better collaboration between real estate professionals and their clients.”
Source: The Guardian
