Nigeria, as well as many countries on the African continent, are not particularly known for their real estate and property development industry, but things were a little different this past year, according to The Nation Newspaper Nigeria. The local news source reported the findings of the most recent industry valuation, and business appears to be booming.
According to a recent report from accounting and auditing firm PricewaterhouseCoopers (PwC), the country’s real estate industry is estimated to have grown from $9.6 billion in 2014 to $13.65 billion in 2015. That number would put the industry’s total contribution to Nigeria’s Gross Domestic Product (GDP) at a healthy 7.6%.
While many real estate investors and property management companies were presumably happy to hear this news, many experts are still warning people to exercise caution. For starters, broader economic stability in the country is far from certain. The country’s currency, the naira, is plummeting on the international market while crude oil prices continue to decline. Still, it’s not having any affect on the real estate market yet.
“The real estate sector has in the past five to seven years witnessed increased foreign and domestic investment,” said Tola Akinhanmi, Senior Manager at Stanbic IBTC. “Entry of foreign developers, investors and service firms; increased joint venture arrangements between local sponsors and financial as well as strategic partners; and development expansion into secondary places, such as Delta, Owerri, Abeokuta, Enugu, Ibadan and Kano, among others.”
One of the areas those in the industry are warning about is the potential for demand in commercial and business type development to fall off. As one expert explained, residential real estate will always be in demand considering its value to people. However, other areas of property development are typically the first to be suffer if the economy as a whole were to take a hit.
At the end of the day, it’s believed that taking caution with investments and spending money will play a big role in how successful future endeavors will end up being.