Nigeria yet to tap potential of real estate

September 11, 2025 by Our Reporter

By Ugbene Chisom Yvonne

Real estate investment is one of the major areas of investment, a critical driving force behind the economic growth of developed nations of Europe, United States of America, China, United Arab Emirates, to mention a few, and a significant contributor to their financial economies.

Known for its dynamic housing market and flourishing commercial property sector, real estate market is incredibly diverse across the different states and cities of the United States of America, with the commercial real estate market presenting lucrative investment opportunities for those aspiring to diversify their portfolios. Government policies, in addition to economic factors such as job growth and interest rates, are not only pivotal to shaping the market, but have a significant impact on the real estate landscape in the United States, with about 20% contribution to its GDP. Real estate markets and practices in Europe and the other developed economies exhibit similarities with the United States, regulatory differences notwithstanding.

Though driven by different factors, both markets attract foreign buyers. Property transactions, property management, and valuation are integral components in the markets. Mortgage financing, property insurance, and property taxes are common aspects of real estate in their economies, while real estate professionals, agents and brokers, play similar roles in facilitating property transactions. In summary, real estate in these countries is very dynamic, contributing significantly to the growth and development of their economies. Real estate is a key driver of their economies.

 Unlike in Europe and the United States of America, real estate sector in Nigeria remains largely untapped for economic growth and development. Nigeria has not fully unlocked the potential of real estate, neither have we fully explored the opportunities in property investment, construction, infrastructure development, property transactions, land-based taxes and many more. Until we go this route, we would not be able to create abundant wealth, jobs, generate revenue, and improve overall economic development.

Even with all the activities we see around, real estate sector is still heavily underdeveloped; there are still a lot of opportunities for development within the sector, the prospects are there for the industry to thrive. And as long as we fail to diversify the economy, tap into the real estate sector, fully unlock, optimize and maximize its potential, Nigeria would not make rapid and sustainable development. If real estate can drive the economies of Europe and America, it can as well drive our economy. Real estate potential is too huge for Nigeria to have over-relied, and even still relying on crude oil; in fact our over-reliance on oil has hindered our development. Mortgage finance which plays a pivotal role in the development of housing markets for instance, is yet to impact the Nigerian real estate in a remarkable war.

Nigeria’s real estate sector, according to industry players, present enormous opportunities. Its market value is estimated at $2.61 trillion in 2025, with residential real estate accounting for approximately $2.25 trillion, and its contribution to the nation’s GDP at about 5%. That Nigeria’s housing deficit is huge and in several millions is evidence that the sector is highly underdeveloped, and offers investment opportunities, particularly in the cities and urban areas. The housing deficit could even be higher than the 21 million units being brandished, considering our ever increasing population, rapid urbanization, the number of graduates the universities and other tertiary institutions produce yearly, many of whom would secure jobs and would need accommodation to settle down, as well as many other Nigerians in need of shelter over their heads.

If we really want to boost the economy, create jobs and wealth, we should look into the direction of real estate. The real estate sector has a crucial role to play in achieving Nigeria’s N1 trillion economy and in making Nigeria become a prosperous nation, but we have to get a number of things right.

Going forward, real estate in Nigeria would remain ‘untapped goldmine’ as long as we fail to remove the ‘landmines’ on the path to fully unlock its potential.

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The dismal rate of land registration (less than 3%) hinders efficient real estate transactions, and makes the country hostile to real estate development. The Land Use Act call for urgent reforms, and failure to reform the Act would keep inhibiting the growth of the real estate sector, and its ability to drive our economy. 

About 94% of properties in Lagos for instance are not registered. This undermines property taxation. We need to streamline and harmonize the registration process for transparency, and unify land tax system. These are crucial for the growth of the sector. To ensure improved efficiency and transparency in land registration, property transaction, and tax administration, we must deploy and use technology; after all, we live today in a technology-driven world. Property development is a lucrative business across the world, without which no country can develop seriously and speedily. 

The biggest challenge of real estate as an investment portfolio, and infrastructure development is liquidity, and unless we have a way around liquidity, we will continue to have serious challenges. In this regard, Public-Private Partnerships; that is, collaboration between the public and private sectors would leverage resources and expertise for large-scale infrastructure and real estate development projects. It would do us a lot of good if we maximize opportunities provided by this arrangement to stay ahead of industry shifts and leverage emerging trends in real estate and construction.

Government must come up with a clearer, and more focused housing and real estate policy to show direction for operators and participants in the sector to plan accordingly, so that activities in the sector will step up, and when there are activities in the sector, initiatives will come up within the sector and other sectors, then the real estate can thrive.

Strong compliance to regulatory frameworks must be ensured, while adoption of property technology, digital transformation, sustainability and green building practices, integrated urban planning, innovative financial solutions, affordability and sustainability combined would transform the Nigerian real estate landscape into a powerful engine for national development. Within this narrative lies our ability to shape the future of Nigeria’s real estate sector, make it effective and key driver of sustainable economic growth, employment generation, and improvement of the overall well-being of its citizens.

•ESV Ugbene is an estate surveyor and valuer.

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