Diaspora Nigerians Fuel Property Boom in Nigeria with Weakened Naira

Strategic Insights -

A fresh boom in Nigeria's property market is being fueled by Nigerians living abroad, driven by a weaker naira and sentimental attachment to their ancestral country home. According to Remi Oshinkalu, chief executive officer of IFT Realty, the recent wave of investment is largely due to the affordability of property prices, made possible by the cheap currency. The influx of dollar-backed buyers is easing financing constraints and offsetting high construction costs, but may widen the affordability gap in urban housing markets, further squeezing the deficits estimated at more than 28 million.

Key Takeaways:

  • Nigerians living abroad are driving a fresh boom in Nigeria's property market, thanks to a weaker naira and affordable property prices.
  • Remi Oshinkalu, CEO of IFT Realty, attributes the surge in diaspora appetite for property to sentimental attachment and the cheap currency, making property prices competitive with other investments.
  • The influx of dollar-backed buyers is easing financing constraints and offsetting high construction costs, but may widen the affordability gap in urban housing markets.
  • Nigeria's housing deficits are estimated at over 28 million, with many unable to afford high-end homes.
  • Oshinkalu urges the authorities to design policies that bring in developers with a tested record and partner private investors to build low-cost housing for Nigerians.
  • The government should acquire land, partner with private developers, and provide their markup to stimulate the construction of low-cost housing.

Statistics:

  • Remittances into Nigeria rose by 9% to $20.98 in 2024, making the country one of the top recipients globally, according to World Bank data.
  • The naira depreciated by over 40% against the dollar last year, making domestic property comparatively cheaper and more accessible to diaspora Nigerians.
  • Nigeria's housing deficits are estimated at more than 28 million.
  • Inflationary pressures and steep infrastructural deficits drive up operating costs for developers, making it challenging to keep property prices affordable.
  • IFT Realty's Shalom Park Estate is a prime example of the growing demand for property from diaspora Nigerians.

Sources:

  • World Bank data
  • Remi Oshinkalu, CEO of IFT Realty
  • Nigeria's Central Bank