In the few years that have passed, before the emergence of COVID-19, Nigeria has had to face many headwinds within their real estate market, as seen in statistics by the NBS. It is stated that in the last twelve quarters there was negative growth in the market. Prior to COVID-19 we saw the market starting to stabilize as well as investors starting to experience a wave of confidence.
PwC stated that there is approximately $230-$750 billion US dollars of dead capital in high value real estate with an estimated $100 billion US dollars currently in the market, implying that there is money available. Unfortunately this means that it is only there in theory and very hard to gain access to and benefit from when wanting to use an asset as collateral.
The ultimate goal is to convert this theoretical amount into live capital. There are numerous reasons for why dead capital remains and one way to tackle them is by amending a few of the legal framework and structures. The numbers show that 97% of real estate in Lagos is not registered, as a direct result of the structural barriers the estate owners are faced with. This is all due to the process of registering a property being lengthy and costly.Some of the new trends that the Nigerian real estate market have adopted is having investors show interest in the health sector (e.g. hospitals and clinics), instead of focusing on generic investments in apartment and office buildings. The government has been trying to ease this process recently by encouraging the use of technology, enabling transparency between all parties as well as a faster and more safe process.