For a lot people within and outside Nigeria, it is a country that is relies on oil through and through. We would be nothing without oil, right? Well, you will be pleased to know this is not true, especially today. Did you know, for instance, that the Gross Domestic Product (GDP) grew by about 6.9% in the third quarter of 2013 largely because of the increased contribution of the non-oil sector? What is more, real estate services hold a significant position in this particular sector.
That is one reason why investing in the real estate industry is a great idea, whether as an individual or corporate entity.
Even more interesting is the fact that the low end real estate comprising of individuals and corporate entities are responsible for the continuous growth witnessed in the recent quarters. This is according to the National Bureau of Statistics (NBS) that continues to churn out the numbers religiously for all to see.
How much more would the real estate industry contribute if its potentials were fully exploited? Only time will tell.
Firstly, Nigeria’s population is the highest in the continent. According to UN-Habitat Features, “Lagos continues to grow and by 2015 it is envisaged to become the world’s 11th largest urban system, with 16 million inhabitants.” Housing remains a problem. The opportunity herein is tremendous.
According to Dr Ngozi Okonjo-Iweala, the Nigerian Finance Minister, Nigeria’s housing deficit is estimated at 17 million units with an additional 2 million units every year. Investing in affordable property such as prefabricated material is a promising venture with a ready market.
Secondly, foreign investors are ever expanding into developing countries looking for office space and buildings to set up shop. So far, there is enough demand but not enough infrastructure for retailers. It is a fact that is often cited in various fora that Nigeria’s first upmarket mall was the Palm Shopping Mall, Lekki in 2006. Many more are needed to cater to the population and demand.
The Nigerian Mortgage Refinance Company (NMRC) was finally launched on January 16th 2014, a perfect New Year’s gift to property investors. It is a private-public initiative that is aimed at lowering the funding cost for housing developers on mortgages. Subsequently, this will promote the affordability of housing to Nigerians, the government’s priority. NMRC will provide mortgage banks with liquidity and funds to sustain the mortgage market.
The World Bank’s International Development Association injected a concessionary loan of $300 million for NMRC’s take-off.
Part of the program is to enable the Federal Mortgage Bank of Nigeria (FMBN) to provide credit facilities to people on the low income side who could do with decent houses of their own. This effect is expected to trickle down to microfinance institutions in the grassroots.
An investment in the property market not only serves to provide housing to the able but also creates an immense source of employment to many Nigerians who would otherwise be jobless. That is killing one bird with one stone, making a huge difference.
After all is said and done, it does not mean that all is smooth in the Nigerian property market as in any other market anywhere else in the world. As Dr. Ngozi Okonjo-Iweala said years ago during a TED Talk, doing business in Africa and in Nigeria is the way to help the continent. There are opportunities galore for both Nigerians and foreigners. What are you waiting for?