Experts and analysts have opined that the future of the real estate sector in 2023 is bright given its good performance record in the first three quarters of 2022. In 2022, the real estate sector contributed N7 trillion to the national Gross Domestic Product (GDP); there was also an improvement in investors’ trust as a result of the housing schemes initiated in the third and fourth quarters of last year. Thus, experts assert that the real estate sector will welcome sustained growth in 2023.
Analysts are of the opinion that regardless of the party that wins the forthcoming elections, there would be an improved performance in the real estate sector. A prediction of sustained growth in the industry by experts and analysts from the Bismarck Rewane-led Financial Derivatives Company (FDC) reported that there will be an expansion of the real estate industry in 2023 by 5.2 percent. The report added that there will be an increase in the real estate’s contribution to the Gross Domestic Product (GDP) to 6.5 percent in 2023 due to high population and urbanization growth.
Real estate’s contribution to GDP is likely to increase to 9.2%.
However, the experts identified increase in the cost of building materials, forfeiture orders on properties of politically recognized individuals, high interest rate environment and poor land acquisition policy as major challenges in the industry in 2023, and already initiated projects by the previous administration may be abandoned. Based on the opportunities present in the construction sector, there would be a likely increase in its contribution to the GDP to 9.2 percent owed to increased spending and investment on road infrastructure with the Nigerian Government having conceded 12 federal highways.
Emphasizing the bright future of the real estate sector in 2023, Managing Director and CEO of Fame Oyster and Co., Mr. Femi Oyedele, stated that the outlook of real estate is promising with reference to the Central Bank of Nigeria (CBN)’s new cash policy and naira notes. He added that with the change of the color of naira notes by the CBN and the maximum cash withdrawal policy, Nigerians who stack money in the house causing money redundancy rather than circulation have been left with few options.
President Buhari is urged to give assent to the National Building Code.
Oyedele said that banks will now have adequate cash which will in turn provide them with adequate balances and money to give out as loans. By so doing, people will grow more interest in housing products as investment forms – with the outdated era of keeping money at home and in offices. The estate surveyor and evaluator affirmed that the real estate sector is expected to yield a more improved performance in 2023 than 2022 because in Nigeria, election year is usually the best performing year.
Concerning major reforms that should be done in the sector in 2023, CEO of Fame Oyster and Co. appealed to President Muhammadu Buhari to give assent to the National Building Code (NBC) including the need of a committee on the formulation of “National Affordable Housing Policy.” The real estate guru further posited that it is high time the nation reduced usage of foreign materials in the construction of buildings to reduce cost. He also said that there should be a reduction in the use of cement for walls, and the need to encourage the use of bricks.
Femi Oyedele predicted a 2.9% growth rate in the sector in 2022.
This time in 2022, Mr. Femi Oyedele, at a Real Estate outlook 2022 event, had made a prediction that the real estate sector would witness a 2.9 percent growth rate in 2022. “I am optimistic that 2022 would be much peaceful and with that, Diaspora Nigerians and foreign investors would be attracted to the real estate sector,” he had said then. He had also added that politicians would find solutions to insecurity challenges in the country ahead of the 2023 general elections.