Nigeria is still faced with a housing deficit of about 17 million units, this is despite an 8.7 per cent growth in the real estate space.
Dipo Davies, chief executive, Real House Communications told CNBC Africa that the sector has been investing in low cost, medium and high cost housing projects, this meant all potential buyers were catered for.
Growth in the housing sector has also been attributed to a boom in investment driven by a young population and rural to urban migration.
“Real estate, especially in the luxury space has received a lot of attention largely because, for many, the returns where robust but demand of getting huge returns on luxury real estate has dropped,” said Davies.
With a growth rate of 8.7 per cent, players in the sector are optimistic that the real estate space will remain robust.
“The real challenge is the supply, the demand is still there but the issue is a number of luxury blocks are coming up in high-end locations such as Lagos, Port Harcourt and Abuja,” added Davies.
He also said the expatriate population who come into Nigeria contributed to the growth in the luxury property sector.
“Luxury real estate is viewed as a hardship boost for expatriates and as a way of softening the posting in such areas with all facilities. This makes such postings especially for multinationals who want to keep their expatriates comfortable acceptable.”
Interest charges are usually high which discourages buying of properties through mortgage.
“Mortgage is used as a bridge loan and this is very rare partly due to high bank charges with some charging interest rates as high as 27 per cent.”