Nigeria’s Real Estate Sector Strengthens GDP Contribution Despite Economic Headwinds
Real Estate Powers On, Climbs Ranking in Nigeria’s GDP Composition
Nigeria’s real estate sector has demonstrated notable resilience over the past five years, strengthening its ranking and economic contribution amid persistent inflation, currency volatility, and the lingering effects of the Covid-19 pandemic, according to recent industry and statistical reports. The sector’s expanding footprint reflects demographic pressures, urbanisation trends, and methodological changes in national accounting.
Sector Resilience Amid Economic Challenges
The real estate industry in Nigeria faced significant disruption during the Covid-19 pandemic, particularly throughout 2020 and 2021, when lockdown measures and social distancing dampened property transactions and construction activities. During this period, its contribution to GDP slid to approximately 2.9 per cent, below the 3.0-3.5 per cent share it commanded between 2015 and 2019.
Concurrently, macroeconomic stressors including inflation that peaked at 34.48 per cent, elevated Central Bank of Nigeria monetary policy rates, and exchange rate volatility strained sector performance, testing investor confidence and slowing market activity.
Despite these challenges, demand for residential space rebounded strongly as remote work trends and ongoing urbanisation increased housing needs. This recovery saw the sector’s GDP share rise to about 3.2 per cent by 2021.
Impact of GDP Rebasing and Sector Ranking
The 2025 GDP rebasing exercise conducted by the National Bureau of Statistics significantly altered the statistical profile of Nigeria’s economy, offering improved visibility into previously under-captured activities, including informal property transactions and emerging sub-segments such as co-working spaces and short-term rentals.
Post-rebasing figures indicate that the real estate sector’s nominal output reached approximately ₦41.3 trillion by 2024. This performance solidified its ranking among the largest contributors to the economy, positioning real estate as the third-largest sector after crop production and trade, displacing crude petroleum and natural gas in the process.
During the first quarter of 2024, real estate contributed roughly 5.20 per cent to real GDP, and by the first quarter of 2025, quarterly nominal contribution reached ₦16.42 trillion around 17.4 per cent of quarterly GDP highlighting both growth and increasing economic significance.
Growth Drivers: Demography, Urbanisation and Housing Demand
Demographic expansion and urbanisation remain fundamental drivers of real estate demand in Nigeria. With the national population exceeding 220 million by 2025 and rural-to-urban migration continuing, the demand for housing, especially in major urban centres such as Lagos, Abuja, Port Harcourt, and Kano, and Ibadan has intensified. This demographic pressure has contributed to a significant housing deficit, estimated at over 28 million units, with an annual requirement of around 700,000 new homes to meet demand.
Demand dynamics have been particularly pronounced in rental markets, where a substantial share of urban dwellers reside, further amplifying sector activity.
Policy, Formalisation and Sector Opportunities
Government initiatives and policy frameworks have played a role in supporting real estate growth. Programmes such as the Federal Government of Nigeria’s Economic Recovery and Growth Plan (ERGP) prioritise housing and infrastructure, while expansion of the National Housing Fund and mortgage refinancing schemes raising maximum loan limits aim to improve affordability and market participation.
Improved data collection and formalisation, especially incorporation of informal real estate market activities into national accounts, have also provided more accurate assessments of sector contributions. Inclusion of digital real estate platforms and tech-enabled property finance is expected to unlock new investment flows and broaden market participation.
Nigeria’s real estate sector has demonstrated sustained resilience, strengthening its economic contribution and advancing its ranking despite significant macroeconomic headwinds. The combined effects of demographic growth, urbanisation, methodological improvements in GDP measurement, and supportive policy frameworks have all contributed to the sector’s expanding role. Continued investment, regulatory support, and data-driven policy could further enhance sector performance, supporting broader economic diversification and development objectives.
