The outgoing year, 2025, can best be described as a watershed or a defining moment for the real estate sector in Nigeria.
It was a year that delivered exponential growth, demonstrating the sector’s resilience in the face of policy shocks and elevated interest rates. Investor confidence strengthened, construction activity rose, and real estate firmly established itself as a major economic pillar. Yet, alongside these gains were persistent concerns, most notably Nigeria’s deepening housing deficit and the rising wave of building demolitions across the country.
Inflation eased to 14.45 percent as of November 2025, down from 33.88 percent in late 2024, but the Monetary Policy Rate (MPR) remained high at 27 percent. Despite this, the sector, especially the residential segment, continued to expand.
Construction activity picked up, reflected in a 9.9-percent jump in nominal output in Q1 2025. Latest data from the National Bureau of Statistics (NBS) indicate that this momentum remains positive, with real-term growth of 5.57 percent recorded in Q3 2025.
By the close of the year, development starts, that is, pipeline projects, stood at 4,800 units, leaving a market gap of 2.7 million units, according to an Estate Intel report on Residential Real Estate Market.
Read also: Why 2025 is a defining moment for real estate sector in Nigeria
Anywhere in the world, the real estate sector mirrors the economy, which was what was demonstrated in Nigeria in 2025.
Notwithstanding the pressures of high inflation and exchange rate volatility, the economy demonstrated remarkable resilience following the GDP rebasing by the NBS.
The GDP rebasing underpinned the growth real estate recorded, giving the sector its real value and position as the third largest contributor to GDP.
This position shows a leap in value from N10.5 trillion in 2023 to N30.7 trillion within the same year and now exceeding N41 trillion, reflecting improved GDP measurement methodologies and broader inclusion of property-related services.
The rebased GDP data showed that real estate services contributed 13.36 percent of GDP, making it the third-largest sector after crop production (23.06 percent) and trade (16.42 percent).
This was a notable structural shift as the sector surpassed traditional heavyweights such as telecoms and information, which contributed 7.67 percent; livestock, 6.18 percent, and even crude petroleum and natural gas, 3.8 percent.
On the flipside of this growth story are the concerns among industry leaders, developers, investors and sundry stakeholders about the widening demand-supply gap, and widespread building demolition at both national and sub-national levels.
The deficit in the sector, which is a measure of its market opportunity, is variously estimated at 20 million, 22 million and 28 million units. Analysts say Nigeria needs to build about 550, 000 housing units and also spend N5.5 trillion annually for the next decade to be able to bridge that gap.
Ahmed Dangiwa, Nigeria’s minister of Housing and Urban Development, who gave this hint, noted that this gap is both a social necessity and a business opportunity, encouraging investors and partners to participate through Public-Private Partnerships (PPPs) and collaborations with housing development finance institutions to tap this opportunity.
On his part, Matthew Ashimolowo, a renowned pastor and a real estate investor, agrees, adding, however, that the country needs to construct about 700,000 housing units annually for the next 20 years to meet the needs of its growing population. “This ambitious goal requires an investment of N59 trillion, he stated, citing a World Bank report.
Another major dent in the sector in the outgoing year was the spate of building demolitions by state and federal government agencies, citing contraventions of building approvals and planning, blocking of drainage channels, and distortion of city masterplan, among other infractions.
Record shows that over 2,500 houses have been flattened by government’s bulldozers. In Lagos, which leads the demolition exercise in the country, about 300 houses were recently pulled down at Mile 12. Meanwhile, regulatory lapses have been blamed for an over N2 trillion investment loss in this sector.
“Building demolition is an evil wind. It does no good to anybody. Apart from investment loss, it leads to homelessness, creating social dislocation among families,” a developer, who did not want to be named, stated.
Kunle Adeyemi, chairman, Real Estate Developers Association of Nigeria (REDAN), South West Zone, said demolition discourages investors, explaining that many of the diaspora investors are withholding investment because the security of their investment can no longer be guaranteed.
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