Nigeria is the most populous nation in Africa with over 180m people, this makes it one of the juiciest markets in Africa. But a lot of opportunities are still left laying around untapped. In this article, you find reasons you should invest in Nigeria’s real estate.
Aliko Dangote once said “We have the best flat land, you can grow anything in the cheapest possible way; turning Nigeria around is not really that difficult. Nigeria is really the best place to invest, it is one of the places to make money; all over the world it (Nigeria) is the best-kept secret actually in terms of investment.”
Top 10 reasons to invest in Nigeria’s real estate sector
- The Nigeria Housing Deficit
- Diverse consumer market
- Improving Infrastructure
- steady growing economy
- Under-served market segments….with very low competition.
Reason#1 The Nigeria’s Housing Deficit.
The first reason to invest in Nigeria’s real estate sector is the huge housing deficits of close to 20 million units!. It’s impossible for the government to fill this gap on its own. This is a big opportunity for investors to come in.
Access to cheap housing is a challenge for most Nigerians. With the high rate of people moving from rural areas to urban areas like Lagos, coupled with the projection that Nigeria’s population will double to 400 million by 2050. You are almost guaranteed good returns on residential and commercial investments.
For a city like Lagos, which currently has the highest population in Africa, small unit apartments are where residential investments hold the most profits in 2021.
Reason#2 Diverse consumer Market.
Buttressing on the first reason for housing deficits. Nigeria also has a relatively large consumer market for all kinds of products and services.
You can be sure to find people readily interested in Buying N100K worth property to 2 Million dollar worth of property in the same market.
According to recent research by African.business Nigeria is the 3rd country in Africa with the highest net worth individuals (HNWIs) that actively buy ultra-luxury goods ranging from real estate to cars, wines, and precious stones/metals.
Reason#3 Improving Infrastructure.
Nigeria is steadily improving its infrastructures especially in urban areas like Lagos and Abuja. In the early days(1990’s) before the infrastructural developments of Lekki- Ikoyi areas of Lagos the price of a plot of land was as low as N700K -1Million per plot.
But today the same plot goes as high as 30M-300M per plot. Thanks to the infrastructural development in these areas.
Buying land In Areas like Ibeju-Lekki of Lagos is seen as the best real estate investment opportunity in Nigeria especially if you missed the chance to invest in Lekki– Ikoyi area in the early days.
As of the time of writing this article, a plot land in Ibeju-Lekki is pegged around 3-10 Million Naira.
But because of the ongoing Infrastructural developments like; Lekki Free Trade Zone, Seaport, The New International Airport, Dangote Refinery, etc…The price of land in this region is destined to 5x the current price in the next 5-10 years.
So investing now, almost guarantees you high returns on your capital for life.
Reason#4 Steady growing economy.
In the past 5 years Nigerian real estate sector recorded the fastest growth yet since 2016 at 2.36 percent.
This shows steady growth in the upward trajectory.
Investing now puts you in the perfect position for growth in years to come.
Reason#5 Under-served market segments….with very low competition.
The Nigerian real estate sector is bursting with life, with numerous transactions happening every day, worth billions of Naira. But there’s this one segment of the market that doesn’t just seem to get enough attention in our opinion.
We are talking about the market for the younger demographics aka Millennials
Millennials are people born between the early 1980s and the early 2000s aged (21-41 years olds). And in 2020 they surpassed the baby boomers(57-75 years olds) as the largest generation group in Nigeria.
Nigeria has one of the youngest populations in the world with a median age of 20, With the core group of Millennials between 18 to 34 years old, who are now within the age ranges where they are most likely to need a home or an apartment to rent or buy.
Also a large majority of them (those who can afford to do so) are beginning to buy their first homes and invest in real estate for the first time.
In the USA, Millennials already make up the largest number of home buyers…The Nigerian real estate sector is gradually experiencing this shift too.
How are they under-served ?
Millennials are very technologically inclined and most of them grew up using the Internet and gadgets.
But most of the processes required to verify or apply for land title documents are largely done manually in Nigeria (physically submit paper documents for authorization).
This factor alone can discourage someone that’s used to using technology to get things done.
The documentation process can be made easier, faster, and more efficient by using an online platform. The government of Lagos is already on this though
Read : Application and payment for cofo plans to be done online from 2021
Also If you are building with millennials in mind, then you will need to build a home that would accommodate their lifestyle i.e. smart homes that are environmentally friendly, with beautiful designs and ample outdoor living spaces.
Millennial homebuyers in Nigeria are tech-savvy and they can see changes and trends taking place within the real estate space all over the world. As a developer, you can’t expect them to accept the same types of homes that were built for the older generations.
Conclusion
In addition to the above reasons to invest in Nigeria real estate.
Nigeria is Africa’s largest economy and has the highest demand for all types of goods and services in all of Africa. Although there are more reasons to invest in Nigeria real estate. The most important thing is to carry out a thorough research on any investment you want to make.
Are there any other reasons can you think of to invest in Nigeria real estate? please share in the comment section.
