2022: Despite inflation, unfriendly policies, real estate sector shows resilience

Delivery of affordable housing suffered setbacks, say experts

Notwithstanding the poor performance of the economy in the outgoing year, the real estate industry has show resilience amid high inflationary trend, flooding and other unfriendly policies that almost crippled investment.

The Guardian gathered that the recorded gains could be attributed to ability of the industry to withstand socio-economic shocks, being private sector led and carefulness by operatives in financial transaction management.

A more worrisome development within the year was the high rate of insecurity and low value of the naira, which forced many investors to become risk averse as developers reviewed prices while others suspended construction.

Nigeria’s inflation rate surged to 21.47 per cent in November 2022, up from 20.47 per cent recorded in the previous month. This affected the costs of building materials such as reinforcement, sand, roofing sheet, tiles, cement and granite,

whose prices rose by over 80 per cent.

Over 60 per cent of the total cost of housing construction is spent on materials, which are mostly imported, while the remaining 40 per cent is spent on labour. Many estate managers and developers did not enjoy the best of times in the sector as they experienced slowed transactions due to other issues like cost of acquiring land/title, scarcity of skilled labour, fluctuating foreign exchange, logistics problems, and supply bottlenecks that affected projections.