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At N3.5m per housing unit real estate sector holds $385bn opportunity value for investors

That real estate remains the most dependable preferred asset class for investment does not consist only in it being durable and relatively risk-averse, but also because it offers immense opportunities and guarantees high return on investment.
Image result for real estate imagesIn Nigeria, opportunities in real estate market are compelling and they are such that with the country’s estimated 17 million housing units deficit, it is estimated that at N3.5 million per housing unit, which is unimaginable given market realities, the value of opportunities in this market open to investors is estimated at $385 billion.
Analysts say this estimate is conservative enough, explaining that even in the country’s  rural communities, it is hard to get low cost housing with N3.5 million price tag, meaning that the value of the opportunities could be many times higher than estimated.
Additionally, using the mortgage-to-GDP yardstick, compared to the BRICS which include Brazil, Russia, India, China, and South Africa, Nigeria has a mortgage funding gap of $58 billion, representing another bouquet of opportunities for real estate  and savvy investors.   
These revelations came to the fore after the rebasing of the country’s economy which shows that as against 33 sectors  believed to be accounting for its gross domestic product (GDP) valued at $270 billion, the country, indeed, has a GDP value of $510 billion produced by 46 sectors.
Real estate sector which accounts for about 7 percent of this new GDP size, has been discovered to be  bigger than previously thought with its current size  seen to be 30—40 percent larger than it was previously estimated. The sector is today the sixth largest sector after crop production and  distribution, crude petroleum and  natural gas, information and communication, telecommunication.
Speaking on ‘Rebasing Nigerian Economy and the Impact on Real Estate Market’ at Mandatory Continuing Professional Development (MPCD) Forum organized by the Lagos State chapter of the  Nigerian Institution of Estate Surveyors and Valuers (NIESV) recently, Doyin Salami, an economist and teacher at the Lagos Business School, noted that rebasing the economy has shown that real estate is the fastest growing sector and its growth is faster than average  GDP  growth. 
“Real  estate grew 8.7 percent in 2013  compared with GDP growth  of 7.4 percent; its average growth was  6.9 percent between 2011 and 2013 while GDP average growth  was 6.4 percent”, he explained, pointing out that the economy has seen structural  shift from being industry-driven to service-driven.
(Culled from
December 3, 2014

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