The real estate sector now contributes more to Nigeria’s GDP than crude oil. That’s according to the Nigeria Bureau of Statistics (NBS), the country’s official data bank. The sector now ranks third in terms of its share of Nigeria’s economic output, just behind crop production and trade.
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Information concerning this is contained in the NBS’s latest GDP report, published recently. The new report reflects a rebased GDP, which the bureau says gives a fairer picture of what Nigeria’s economy currently looks like.
According to that report, the real estate sector contributed ₦41.2 trillion worth of output to the country’s economy in the year 2024. This amounts to 10.78% of Nigeria’s GDP. This contrasts with the ₦22 trillion for that sector (6.24% of GDP) indicated in the previous years.
Under the new measuring convention, crop production maintained its position as the top contributor to Nigeria’s GDP in 2024, accounting for 17.58% of national output. Trade came second, with its share put at 17.42%.
Telecommunications placed fourth behind real estate. The sector, which has recorded massive growth over the last decade and a half, delivered products and services worth 6.78% of the country’s output. This resulted in oil and gas being pushed into fifth place, continuing a multi-year trend in which that sector’s portion of total GDP has steadily diminished.
GDP figures are rebased when the items constituting data on economic output are adjusted to mirror the current realities of a country’s economy. This may happen periodically, as national economies evolve in response to local and global pressures.
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A Closer Look at the Real Estate Sector’s Performance
The NBS’s new figures indicate an increasing demand for property and other real estate products and services. The bureau says the figures were arrived at using fresh data, and suggests that the sector’s output was previously undercounted.
Other reasons for the revision include the registration of more properties, the adoption of formal building practices, and changes to methodologies for data collection.
The NBS’s report explains that the new numbers “revealed the sector’s growth” and “highlighted its potential for further expansion”. It pointed to urbanisation and a growing economy as reasons for this upward tick in valuations.
Anecdotal evidence appears to support this assertion. A rapidly growing population and an already existing housing deficit have combined to drive property values up. This supply gap is exacerbated by the high cost of building permanent structures (including homes, shops, office blocks, and industrial real estate).
Property is becoming both a speculative asset and a hedge against raging inflation. Investors have taken to luxury real estate as a value multiplier. This has left the arena for low-cost housing largely underserved.
While these issues present a challenge to authorities, they also show that there are opportunities waiting to be explored by investors. Erasing the housing deficit, which presently sits at 28 million units, could mint trillions of naira for bold and innovative entrepreneurs.
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Opportunities for Real Estate Entrepreneurs
Businesses in both the traditional real estate space and the emerging PropTech (property technology) segment can realise a massive windfall of profits from tackling Nigeria’s urban housing problems.
As already mentioned, low-cost housing is an underexplored area. Companies that develop relatively inexpensive, quickly deployable solutions here can scoop billions in profit.
The country’s expanding cities—including second-tier urban centres and agglomerations –are throwing up opportunities for investors. They could purchase land and buildings on the outskirts of such locations at very low prices, and watch the value of these assets skyrocket in just a few years.
PropTech startups can also help with technologies like online marketplaces for rent and purchases, blockchain for contract and documentation transparency, durable building materials, and engineering for the quick turnaround of construction projects.
Obstacles abound in this sector, but so do the opportunities for problem solvers.
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