Lagos-based property development firm, Octo5 Holdings Limited has projected a 25 per cent growth in the real estate sector within the period 2023 to 2024.
The firm revealed this in its 2023 economic review and real estate outlook, highlighting the significant contribution of the real estate and construction industry to Nigeria’s economic growth.
The report also anticipates restructuring and consolidation of agencies like the Federal Housing Authority, Federal Mortgage Refinance Corporation, Federal Mortgage Bank of Nigeria and Family Homes Fund, which will promote housing development and ease home ownership for Nigeria’s workforce.
The outlook provides insight into Nigeria’s global economic outlook, highlighting the challenges posed by the country’s reliance on imported finished products, which the global energy crisis has further exacerbated.
The real estate and construction sectors contributed over N28 trillion to National Gross Domestic Product (GDP) in 2022. Specifically, the real estate sector earned N10.2 trillion, while the construction sector contributed N18.6 trillion within the same year.
Following the growth trajectory, the firm also projected increased public construction and employment stimulus packages with incentives for development of new urban nodes across the country.
“Our projected major growth hubs for 2023 are Lagos, Lagos/lbadan Expressway, Port Harcourt, Uyo, Kaduna and Kano for residential developments. We project Oyo, Ebonyi, Benue, Kebbi, Anambra and Ogun as hubs for increased agro-tech and mechanised industrial hubs.
Demand for affordable housing in serviced communities priced between N10 to N40 million will remain high, while undersupply remains a huge barrier,” it revealed.
The Chief Executive Officer, Octo5, Mr. Babajide Odusolu, said: “Considering Nigeria’s strong fundamentals and large market, an economic correction is inevitable, although it may come with initial challenges. The increasing densification of Abuja will continue and project increased activities around the Mpape, Life Camp, Fish market, Maitama II and Lugbe axis of Abuja.
“We anticipate an increased focus on Uyo, as a new south-south hub and a resolution of the farmer and herder clashes, which will trigger a renaissance of agricultural hubs, especially in Benue and Plateau states.
“The completion of the first phase of the Blue Line rail and activation of the Red-Line Rail by the Lagos State government will further open access between the Lagos mainland and Island. We anticipate a pivot towards the Agbado/Badagry Axis in Lagos to complement ongoing pivot towards the Epe axis by developers owing to the vast land available for housing.”
The report also highlights that the cost of production, primarily building materials, witnessed significant spikes due to a weaker currency and Central Bank of Nigeria’s attempts to regulate foreign exchange.
“The ongoing realignment of the BRICS nations, in which we anticipate Nigeria to play a significant role, coupled with the Sudan conflict and unrest in the Sahel region, as well as the emerging economic conflict between China and the United States, presents Nigeria with an opportunity for a focused and Africa-centered renaissance,” it stated.
The firm’s Research Manager, Adewole David, noted that construction and urban renewal would be catalysts for job creation, wealth generation and economic growth.
He said: “We envision vocational skills development playing a vital role in youth employment, with well-structured paid internship programmes managed by the organised construction industry in collaboration with certified training institutions.
“While the International Monetary Fund (IMF) has predicted a 3.2 per cent rise in the Nigerian economy, the report suggests that the country can exceed this projected growth rate by increasing public construction and provision of fiscal incentives to encourage the development of new urban nodes across the country using private capital.”