What could be more priceless in a country of about 170 million people than shelter? What could be more appealing and more sought after in a country where everyone wants to make more money, if not a richer goldmine where they would dig and be rewarded? Then which sector can be more rewarding in a country where the unemployment rate of its population has risen from 8.2% to 9.9 in the past one year, and a wider 11% are underemployed (Nigerian Bureau of Statistics,2016), if not an economic sector that is valued at N59 trillion. The Managing Director/Chief Executive Officer, Federal Mortgage Bank of Nigeria (FMBN), Mr. Gimba Ya’u Kumo, described Nigeria’s real estate market in this way: “The total value of the real estate market in Nigeria is put at N59 trillion and that is potentially six times bigger than the local stock market, which is now valued at N12 trillion. On this basis, the sector cannot be ignored.”
According to Jonathan Millard, Chief Operating Officer of Troloppe Property Services, a South African real estate firm based in Nigeria, “despite the economic downturns affecting the country as a result of the fall in oil price, the sector has experienced steady growth of 10 percent in the last eight years.” He believes that the primary drivers of this growth are the ever rising population of the country per annum, which has consistently stood at 600 thousand –over the last five years.
In their annual report for November 2015, the Nigerian Bureau of Statistics (NBS) believe that the major drivers of the growth of Nigeria’s real estate sector include an increased inflow of foreign investment from South Africa, China, the Middle East, and the USA; increased investment from local companies, an increased desire of Nigerians in the diaspora to invest at home and the rapid growing population of high net worth individuals.
Because of the high demand for office spaces, residential apartments, lands and shops, more people have joined the business. The very rich and the middle class are all playing in the market according to their investment power. According to records from the Nigerian Corporate Affairs Commission report of January 2016, a quarter of business registration requests that come in every month from the various states, are in real estate. This rapid growth has opened up enormous opportunities for lawyers, structural Engineers, Architects, Real Estate Brokers, advertising agencies, the media and the agency companies. The Banks and the Mortgage institutions are also major players. They prefer to give loans now for real estate development purposes than for other intangible and risk-prone investments.
It is the operations of these big players and the growing demands for accommodation and business spaces that have opened doors for the smaller but indispensable players ‘the local agents’. These freelancers, according to the Castles weekly magazine form the larger majority and attend to the needs of the common Nigerians who cannot pay for the services of bigger agency firms like Jide Taiwo and Co, Diya Fatimilehin and Private Property LTD, etc. According to JobsinRealEstate.Org, about 8,500 jobs are created every week via real estate agency opportunities. More young people who did not have jobs previously are beginning to harness these agency opportunities as they have 10% of every real estate deal that happens through them, regardless of the amount involved.