Relying on the performances recorded in the first three quarters of last year, experts/ analysts are of the opinion that outlook for the real estate sector in 2023 is bright.
HAVING contributed over N7 trillion to the nation’s Gross Domestic Product (GDP), coupled with the improved investors’ trust in the industry, no thanks to the number of housing schemes initiated in the third and fourth quarters of 2022, experts say there will be sustained growth in the real estate sector in 2023.
According to them, no matter which party wins the forthcoming elections, real estate sector would witness an improved performance over 2022.
Predicting sustained growth in the industry, experts/analysts from the Bismarck Rewane-led Financial Derivatives Company (FDC), in their report, said that real estate would expand by 5.2 per cent in 2023
They added that contribution of real estate to the Gross Domestic Product (GDP) would increase to 6.5 per cent in the New Year, no thanks to high population and urbanization growth
The analysts identified high interest rate environment, increase in the cost of building materials, poor land acquisition policy, and forfeiture orders on properties owned by politically exposed persons as major risks in the sector in 2023.
Talking about opportunities in the construction sector, they said the sector’s contribution to GDP would hit 9.2 per cent due to increased spending and investment on road infrastructure, noting that Nigeria’s government had already concessioned 12 federal highways.
However, they said the projects initiated by the previous administration may be abandoned.
Managing Director/CEO of Fame Oyster and Co, Mr Femi Oyedele, said that real estate’s outlook in the new year is bright, citing the Central Bank of Nigeria (CBN)’s new cash policy and naira notes.
According to him, as an election year, and with the CBN change of the color of the naira notes and the maximum cash withdrawal policy, Nigerians in the habit of stacking money in the house and who made more money to be redundant than being in circulation have been boxed to a corner.
“We would now see adequate cash in banks which will make them to have adequate balances and money to issue out as loans. More people will be interested in housing products as investment forms as the era of keeping cash at home and in the offices is gone,” he said.
Oyedele, who is a practicing estate surveyor and valuer, said the expectations in the real estate sector for 2023 is an improved performance over 2022, pointing out that election year in Nigeria is usually the best performing year, adding that the sector would witness a tremendous growth.
On major reforms that should happen in the sector in the New Year, Oyedele urged President Mohammadu Buhari to assign to the National Building Code (NBC), adding that the nation would need a committee on the formulation of “National Affordable Housing Policy.”
He said that time had come for the reduction of the usage of foreign materials in the building construction in order to reduce cost.
“We need to reduce the use of cement especially for walls and paving and we need to standardize our sandcrete blocks and encourage the use of bricks.
“Our houses are not economically distributed as there are numerous abandoned properties,” he said.
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