‘Volatile Economic Climate Discouraged Domestic, Foreign Real Estate Investment In 2025’

Volatile economic climate and increased uncertainty are discouraging both domestic and foreign investors from investing in the real estate sector in 2025, according to the report.

According to a 2025 Nigeria Real Estate Report by Ubosi Eleh & Co, economic uncertainties and persistent supply chain disruptions have caused significant delays in construction projects across Nigeria, affecting timelines, budgets, and overall sector productivity.

The volatile economic climate and increased uncertainty are discouraging both domestic and foreign investors from investing in the real estate sector.

“Economic uncertainties and supply chain disruptions led to project delays and cost overruns, impacting the delivery timelines of real estate developments. The devaluation of the naira and rising input costs, such as cement, steel, and labour, pushed up construction costs, making it more expensive to develop new projects.”

According to the report, the growing demand for affordable housing is coupled with government initiatives to promote affordable housing development opportunities for developers.

It added, “The volatile economic climate and increased uncertainty discouraged both domestic and foreign investors from investing in the real estate sector. Rising operational costs, including utility bills and maintenance expenses, forced landlords to increase rental rates, further straining tenant affordability.”

Reacting to this, senior partner at Ubosi Eleh & Co. Emeka Eleh, said the naira’s devaluation and the rising prices of construction inputs, including cement, steel and labour, have significantly increased building costs, making new developments more expensive to execute.

He added that economic uncertainties and supply chain disruptions have led to project delays and cost overruns, impacting the delivery timelines of real estate developments.

‎“The rising operational costs, including utility bills and maintenance expenses, forced landlords to increase rental rates, further straining tenant affordability,” Eleh said. “The volatile economic climate and increased uncertainty discouraged both domestic and foreign investors from investing in the real estate sector”

Confirming the development, the CEO of Knight Frank Nigeria, Frank Okosun, said: “We have seen a sharp rise in house prices to about 40 per cent due to inflation, both for sales and leases. Newly built properties reflect the increase due to the spike in inflation.”

‎Okosun stated further that, on the supply side, market uncertainty, coupled with rising costs, has led stakeholders to adopt a wait-and-hold strategy, slowing capital-intensive projects and leaving capital to find its way into capital-efficient projects.