Report links population growth, urbanisation to booming residential market

A new report stated that population growth, urbanisation and the fervent desire to own property have contributed to the resilience and unwavering residential market.

It posited that notwithstanding the downturn in the general economy, the growth has been in the major cities in the country, namely Lagos, Abuja, and Port Harcourt respectively.

The report envisaged that property prices would experience significant increases ranging from inflation and construction cost hikes.

The Ubosi Eleh Real report projected that due to the economic downturn, finding tenants for vacant spaces in massive malls would be challenging, whilst, in contrast, investors in modest shopping plazas and supermarkets smaller than 1,000 square metres should anticipate substantial rewards.

On office real estate, the report noted that the adoption of remote working models and downsising resulted in increased office vacancy rates. The decline in tenant demand resulted in little growth in renters or a slight decline in certain sectors.

The report is hopeful that despite a myriad of challenges facing the retail sector,, notably unreliable electricity supply, the devaluation of the naira and insecurity amongst others, it will prosper in 2024 because as retail outlets align with Nigerian consumers’ preferences, there would be increased purchasing as economic prosperity surges.

It noted, however, that while retail outlets would maintain patronage, the diminished purchasing power of the consumers will result in a decrease in the average basket size of shoppers.

Nevertheless, the report was optimistic in its outlook projections for the current year 2024. It opined that with political stability, warehousing and logistics would make significant contributions to the economy in 2024.

It noted that although the hospitality sector in the Northern region of the country was undermined by a web of security issues and challenges, there would be a better performance in 2024 in the Southern half of the country, particularly in Lagos where hospitality real estate experienced a surge in the previous year by the entry of new players to the market.

It described the previous year as one that was not only uncertain for economic activities but also one that required a conservative approach to investments.

In its analysis of the 2024 budget of N28.7 trillion, infrastructure and housing had a portion of N1.32 trillion for projects across the country, representing 5 per cent of the budget allocation. The report considered this allocation grossly inadequate, more so, in the light of the depreciated naira value.