Highs, lows of property sector in 2025

Nigeria’s real estate sector is currently standing at a corssroad with statitistics indicatinf strong potentials, yet overwhelemed with systemic and structural challenges

Daily Trust reports that one of the major challenges facing Nigeria’s property sector has always been in the area of affordable funding and financing of housing schemes for low and middle income earners in the country.

The world bank has put Nigeria’s housing deficit at about 28 million with the Federal government projecting an annual funding of N5 trillion to bridge the gap.

Daily Trust analyses the highs and lows of the sector in the year 2025 according to current realities

Lows

Experts have overtime attributed a combination of factors which still hinders the growth of the real estate sector as seen in the year 2025, including weak mortgage systems, limited access to credit, high interest rates, ineffective housing policies and an urbanisation rate that continues to outpace housing supply.

With a rapidly growing population projected to exceed 250 million by 2030, the demand for housing and commercial spaces especially in 2025 saw a rapid increase.

Checks by Daily Trust has shown that one of the biggest challenges confronting the sector is the high cost of building materials, largely driven by inflation and heavy dependence on imported inputs.

The volatility of the naira has worsened this problem, making project costs unpredictable.

Although the fx market has experienced some level of stability, developers in the year under review consistently lamanted the high cost of building materials, which often results to passing extra costs to buyers

Although government has initiated efforts to encourage local production of cement and steel, yet nothing substantial to address the gap between supply and demand.

Another challenge the sector is still facing is problem of land acquisition and titling. Nigeria’s land administration system remains opaque and complex, often requiring multiple layers of approval from traditional rulers, state ministries, and land registries.

This bureaucratic web not only delays projects but also inflates costs and exposes investors to the risk of litigation. Without an efficient and transparent land titling process, large-scale investments particularly from foreign players will remain hesitant.

The infrastructure deficit poses another major obstacle. Many promising development sites lack basic amenities such as roads, water, and electricity, which significantly increase development costs.

In the same vein, access to finance remains a weak link in Nigeria’s construction industry. With interest rates on the rise, few long-term lending options, and a mortgage system that’s yet to mature, developers face significant roadblocks.

Banks lend at over 30 per cent which has remained unsustainable for developers

Similarly, Nigeria’s mortgage sector still has not matured to the level where many Nigerians can key into, as such, it remains a challenge in the year under review.

However, despite these challenges., experts believe there arr remarkable opportunities just as housing deficit is estimated at over 20 million units, it presents an opportunity for investment potential as ffordable housing, in particular, remains an underserved market.

Gains in 2025

In July 2025, the Real Estate sector emerged as Nigeria’s third-largest economic sector following the latest GDP rebasing by the National Bureau of Statistics (NBS), recording a staggering jump of over N25 trillion between the old and rebased figures for 2023.

According to the revised data, Real Estate’s contribution to GDP surged from N10.5 trillion in 2023 (pre-rebasing) to N30.7 trillion after the rebasing and further climbed to N41.3 trillion in 2024, positioning it just behind Trade and Crop Production.

Meanwhile, Trade overtook Crop Production to become Nigeria’s largest economic sector, with a rebased contribution of N68 trillion in 2024, up from N55.3 trillion in 2023. Crop Production, which previously led the rankings, followed closely with N61.9 trillion in 2024 after rebasing.

The NBS stated that the upward revision reflects a more accurate estimation of property values, increased formalization in housing activities, better data capturing of real estate services (including rentals, brokerage, and land valuation), and rising urbanization.

This development suggests that the sector was grossly undervalued in previous GDP computations and now better reflects actual economic output.

The 2023 rebased data places Real Estate ahead of long-time economic drivers such as Telecommunications (N23 trillion), Construction (N13.8 trillion), and even Crude Petroleum & Natural Gas (N13.1 trillion) for the same year.

Daily Trust reports that NBS announced the rebasing of Nigeria’s GDP data, with 2019 selected as the new base year.

This decision, according to the NBS, was driven by the year’s status as a period of “relative economic stability” compared to other recent years, which were marked by significant economic shocks.

The latest GDP rebasing exercise offers a clearer picture of Nigeria’s economy, revealing that Real Estate, Trade, and Professional Services are playing far larger roles than previously recorded.

Meanwhile, a real estate expert, Nasiru Baba told Daily Trust that  Nigeria’s property market in 2025 is responding positively to emerging economic stability, especially with commercial property.

“Statistics show that transaction volumes in the sector grew fivefold to $336 million, up from $53 million in 2023,”

He however noted that government interventions like the renewed hope housing scheme and others must be felt by Nigerians in the coming years.

He futher stated that the issue of high cost of building materials must be addressed head on.

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