A new report released recently has said that property developers will have to spend more this year to provide their own infrastructure, given the deplorable state of federal roads or maintaining existing ones.

The Ubosi Eleh 2023 Report, now in its seventh edition, stated the allocation of N398.28 billion made to the Ministry of Works and Housing from the national budget of N20.71 trillion was grossly inadequate, moreso, for a ministry that is intensively capital driven.

The report argued that the low allocation implied that for the 2023 fiscal year, there would be little room for capital projects. It posits that Nigeria’s economy, the largest in Africa, showed resilience and renewed hope, while real estate in particular, recorded average performance on the scorecard.

According to the report, with inflation rising to an all high at 21.09 per cent and the country gearing up for the general elections in early 2023, real estate activities were adversely affected. The residential sector of the real estate market experienced slower short-term transactions because of rising cost despite the fact that it enjoys enormous incentives.

In the commercial estate sector, owing to the difficulties in the market for commercial office space, developers chose to build for mixed use projects. However, the hospitality sub sector of commercial real estate had a significant upturn after being negatively impacted for two years by the COVID-19 pandemic.

One noticeable trend was the renewed emphasis on the development of one- and two-bedrooms flats, which is the preferred accommodation for the millennials due to their smaller size and lower budgets.

The survey also indicated that the rental values for selected rental accommodation types and commercial real estate across the states of the federation for 2022 was either the same as in the previous year or had slightly varied increases. The report noted that real estate performed better than expected in many instances and that was why the expected slump did not happen.

The report observed that Lagos and Abuja had benefited most in real estate investment owing to the high level of insecurity in the country and that this trend would continue. Among its projections are that the demand for medium-sized retail space for shopping complexes, shopping centres, corner and neighbourhood shops would be positive and high.

The report expects rental demand to move upwards by as much as 10 per cent, especially for flats with the demand increasing as the year wears on.

The report also maintained that the market would remain slow all year with a chance of rebound in 2024 depending on the state of the economy.