What you should know about real estate sector after GDP rebasing

The recent rebasing of Nigeria’s GDP by the National Bureau of Statistics (NBS) has confirmed real estate as the third largest sector. The recent rebasing shows that real estate has displaced oil and gas as Nigeria’s third largest sector. Real estate is now behind crop production and trade which have been confirmed by the NBS […]

The recent rebasing of Nigeria’s GDP by the National Bureau of Statistics (NBS) has confirmed real estate as the third largest sector.

The recent rebasing shows that real estate has displaced oil and gas as Nigeria’s third largest sector.

Real estate is now behind crop production and trade which have been confirmed by the NBS as Nigeria’s biggest and second biggest sectors respectively.

Here are four things to note with regards to the rebasing of the sector.

• ‘Rebased GDP reflects true structure, size of Nigeria’s economy’
• Ensure safety of bank deposits, Edun charges NDIC

 

Accurate data capture

According to the NBS, Major  reason why thr real estate sector overtook  traditional and critical sectors like oil and gas, include a more accurate reflection of the sector’s contribution to the economy, estimation of property values, and increased formalisation in housing activities.

The NBS revealed that the rebasing exercise involved updating base years and incorporating new data, showing that real estate’s actual output was previously underestimated.

The Bureau noted that the exercise also revealed a shift in the country’s economy, with real estate now playing a more prominent role compared to sectors like oil and gas, which had previously held a dominant position, adding, “the exercise not only revealed the sector’s growth but also highlighted its potential for further expansion, especially with continued urbanization and a growing population.”

 

Formalisation of housing activities

The National Bureau of Statistics further explained that formalisation of housing activities, such as the registration of properties and the adoption of formal building practices, contributed to a clearer picture of the sector’s economic contribution

It further pointed out that there were more robust data collection methods, leading to accurate representation of real estate activities, including rentals, brokerage, and land valuation.

In monetary terms, real estate recorded a staggering jump of over N25 trillion between the old and rebased figures for 2023. The revised data shows that the sector’s contribution to GDP surged from N10.5 trillion in 2023 (pre-rebasing) to N30.7 trillion after the rebasing and further climbed to N41.3 trillion in 2024, positioning it just behind trade and crop production.

 

Growing demand

The NBS further explained that in nominal terms, real estate services grew by 46.52 percent in the Q3 of 2024, higher by 43.70 percent points than the growth rate reported for the same period in 2023 and lower when compared to the preceding quarter.

On a quarter-on-quarter, the sector growth rate was 16.15 percent. It contributed 5.43 percent to real GDP in Q3 of 2024, lower than the 5.58 percent recorded in the corresponding quarter of 2023.

Despite the declining purchasing power, there is a growing demand for Nigeria’s real estate.

Though there are conflicting figures regarding Nigeria’s housing deficit, several real estate experts estimate the gap at 28 million units, stating that the nation needs 700,000 new homes annually.

The real estate market is anticipated to achieve a value of $2.61 trillion by 2025, Statista says, showing that the sector has huge potential.

“Over the period of 2025-2029, the market is expected to exhibit a compound annual growth rate (CAGR) of 6.91 percent, resulting in a market volume of $3.41tn by 2029. When compared globally, the United States is projected to generate the highest value in the Real Estate market sector, amounting to $136.6tn in 2025.

“The real estate market in Nigeria is experiencing a surge in demand for luxury apartments in major cities.” it said

 

Why rebasing?

GDP is refered to the total value of all goods and services produced within a country over a specific timeframe, typically one year.

It also serves as the barometer to meanlsure of a nation’s economic well-being, as an increase in GDP suggests economic growth, while a decline points to an economic slowdown or recession.

GDP rebasing involves updating the method used to calculate the country’s economic output, often by selecting a more recent base year for comparison.