There has been a revelation in a research, the surge in property prices in Nigeria’s real estate industry has resulted in a $900 billion increase in dead capital.
According to the BuyLetLive research, the market’s opaqueness caused a significant portion of value to be lost in Nigeria’s land and residential asset classes.
The study, which was produced by a research team under the direction of Martin Uche, also provided an explanation for the country’s double-digit growth in residential real estate prices, which contributed to the total price jump.
He noted: “The increases were underpinned by rising cost of building materials, foreign exchange volatilities and operational costs.”
Read Also: Nigeria Behind Botswana In Real Estate Market FDI Flow
Commenting on the commercial market, Uche said that since 2018, the commercial real estate market had continued to struggle either due to over supply, decreasing occupier pool and shrinking purchasing power, saying that this had been more pronounced in Lagos and Abuja, particularly in the market for large-scale prime retail and office projects.
Uche noted that the proptech spaces that was once a darling to investors hit a rough patch in the country in 2023 as a result of global financial market volatility, saying that Nigeria’s proptech startups had raised more than $7million in funding in 2022.
According to the report, “this constituted more than 43 per cent of the $16 million total funds raised in Kenya, Egypt and Nigeria combined.
However, in the last quarter of 2023, the report noted that the funding value had fallen to less than $2 million, representing a significant drop of over 70 per cent.
Also, the company’s Group Chief Executive Office, Engr Ola Daramola, noted in the second edition of its annual property price index report in Nigeria that 2023 was a particularly challenging year for the global economy, stressing that Nigerian real estate market was no exception.
Read Also: Real Estate Expert Predicts More Nigerians To Invest In Property in 2024
Daramola added that BuyLetLive had strengthened its engineering team in 2023 and grew the inventory of properties on their platform and was also recognised by the Africa Housing Awards as the best online real estate portal of the year.
The Chief Executive Officer of the company, Gbenga Osowe added that the report contained a 38-page document that analyses price movements in Nigeria’s real estate market in 2023, saying that fixing the problem in the real estate sector from a private sector perspective would require concerted effort in market research.
He said that BuyLetLive was a Nigerian proptech that connects property seekers for rent, lease or purchase with verified real estate agents, developers and home owners, offering advisory and media promotion services to developers who want more visibility and leads for their developments.
According to him, “company boasts of a robust digital ecosystem enabling all stakeholders to interact more transparently and with ease. The proptech hinted at plans to roll out new products and services in the coming months as part of its mission to revolutionise Nigeria’s real estate industry leveraging technology.”
