Notwithstanding the negative growth recorded in 2016, the real estate sector is expected to grow at an average rate of 5.39 per cent between 2017-2020.
The growth, experts said, would however depend on the supports from private and public investments, agricultural revolution, favourable oil prices, increase in volume of oil production and capable political leadership.
This is the forecast of Real Estate Industry Outlook 2017 presented by Cromwell Professional Services International (PSI), a real estate research and advisory body in Lagos, hinted that the sector will record a flat or modest recovery from the sector's decline in 2016.
Cromwell revealed that the real estate market was less vigorous in 2015-16 due to the country's macro-economic and socio- political challenges, which led to suspension of some planned real estate development projects, slow down in growth of rents, inflation of construction materials and labour costs.
The Country leader, Cromwell (PSI), Sola Enitan explained that Nigeria remains a major driver of growth for the real estate industry going by its population currently estimated at over 180 million and with the yearly average growing rate of three per cent.
Other major growth drivers identified include rising urbanisation, growing middle class, increasing investment from local participants that include Pension Funds and Mutual funds; growing number of High Net Worth Individuals (HNWIs) investing in real estate, and targeted intervention by the Federal Government in the housing finance sector.
Enitan also identified increased Foreign and Domestic Investment (FDI) as another significant driver of growth for the real estate industry expressing hope that in the long term, the industry is expected to experience an increasing entry of foreign investors, increased joint venture arrangements and development of secondary cities in Ibadan, Owerri, Abeokuta, Enugu and Kano.
To him, if the new bills pending in the national assembly like the Infrastructure Development Bill, Engineering Registration Act (Amendment) Bill 2016, Nigeria Industrial Development and Zones Bill 2016, Nigerian Assets Management Agency Establishment and Regulatory Bill 2016 and the HB 521 National Housing Fund Act (Amendment) Bill 2016 are successfully passed into law in 2017, they will impact positively on the real estate industry.
Speaking also on the outlook for the six -geopolitical zones, the organisation's head of strategy, John-Paul Iwuoha stated that findings from trends across Nigeria revealed a real estate market weakened by socio- economic challenges.
He however noted that some states and regions have remained resilient.
"The Market Analysis for Lagos State shows one of the highest property values in Nigeria and one of the widest variances in value from one location to another within the same state/territory. The effects of the economic recession have affected the prime and luxury segments of the property market. However, overall property values remained robust, especially in the mid-market segments.
"The Federal Capital Territory also has one of the highest property values in Nigeria and one of the widest variances in value from one location to another within the same state/territory.
"The effects of the economic recession have adversely affected property values in the FCT with high vacancy rates, especially in the prime real estate segment. This is especially obvious in the poor year-on-year return for 2016", he noted.
According to him, market analysis, in the North West, the real estate market prices have stayed relatively flat. Kaduna's prices continue to suffer from protracted ethno-religious conflicts while in the North East, the instability, destruction and human displacement caused by the Boko Haram conflict has led to a slump in real estate market prices.
Iwuoha stated that in the Southeast property prices will continue to experience steady appreciation buoyed by increasing market participation while market analysis for South-South shows that the real estate market prices will likely continue to experience moderate growth in 2017.
For South-west, property prices in that zone, he said have remained resilient in the face of economic challenges.