Challenges of Buying Properties in Nigeria – Chinedu Ndibe
No doubt, the Nigerian real estate sector is a gold mine. It contributes greatly to the wealth and savings of many Nigerians. And as a sector with high demand, it also plays a huge role in the country’s economy. Unfortunately, there are several critical challenges limiting its growth.
It must be stated that the government has, over the years, made significant reforms to address these challenges. However more needs to be done.
Here are the 4 major challenges of buying real estate in Nigeria:
- Overpriced Properties: The high prices of properties across most urban cities in the country posses a major challenge to the real estate market. Commercial states like Lagos, Rivers and Abuja are worst hit. This challenge discourages many potential investors.
- Frustrating Land Registration: On average, the property registration process is Nigeria takes as long as 6 months to 2 years. During the wait period, the value of the property depreciates. Also, cash incentives are often required to facilitate the process. These conditions are everything but appalling to investors.
- Devaluation of the Naira: In 2015, the naira was valued at 197/$, today it hovers around 620/$. This affects the real estate industry because most raw materials used in construction in Nigeria are imported. Ergo, the continuous fall of the value of the naira, inevitably drives up the cost of properties.
- Drought of Competent Builders/Contractors: Inexperienced builders and contractors abound in Nigeria. What’s worse, many of them use inferior raw materials to rake in extra cash.