An online real estate market firm, BuyLetLive, has announced the launch of its second edition of its annual Nigeria Property Price Index Report.
The Nigerian first AI powered real estate portal that is helping real estate buyers and sellers to consummate transactions in minutes, launched the report today.
The 38-page document analysed price movements in Nigeria’s real estate market in 2023 and includes opinions on topical issues.
According to the group chief executive officer, Engr Ola Daramola, noted that 2023 was a particularly challenging year for the global economy, and the Nigerian real estate market was no exception.
He mentioned that BuyLetLive, like many other businesses in the industry, showed remarkable strength and unity in the face of unprecedented challenges.
Ola said that the company had strengthened their engineering team in 2023 and grew the inventory of properties on their platform and was also recognised by the Africa Housing Awards as the best online real estate portal of the year.
Speaking on why this report is needed by the industry, the managing director, BuyLetLive, Gbenga Osowe, quoted a PWC publication that puts the value of dead capital in Nigeria’s real estate market at 900 billion dollars.
According to Gbenga, a large chunk of value especially within the residential and land asset classes in Nigeria are lost due to the opaqueness in the market. Fixing this problem from a private sector perspective will require concerted effort in market research.
Martin Uche, who leads the research team at BuyLetLive stated that there was an overall spike in property prices with a double-digit increase in residential real estate prices across the country. The increases were underpinned by rising cost of building materials, FX volatilities and operational costs. Commenting on the commercial market, Martin Uche mentioned that since 2018, the commercial real estate market has continued to struggle either due to oversupply, decreasing occupier pool or shrinking purchasing power. This has been more pronounced in Lagos and Abuja, particularly in the market for large-scale prime retail and office projects.
Other highlights captured within the report were the slowdown in Proptech funding in Nigeria. Martin noted that the Proptech spaces that were once a darling to investors, did hit a rough patch in 2023 as a result of global financial market volatility. The report mentioned that Nigeria’s Proptech startups had raised more than $7 million in funding in 2022.
According to the BuyLetLive report, this constituted more than 43 per cent of the $16 million total funds raised in Kenya, Egypt and Nigeria combined. However, in the last quarter of 2023, the funding value had fallen to less than $2 million, representing a significant drop of over 70 per cent. Despite these many headwinds, the report shared a strong optimism for the year ahead