Abuja – January 29, 2024 – Viewpoint Housing News.
A recent analysis by Estate Intel found that while FDIs into the real estate sector are increasing in African nations, Nigeria lags behind Botswana and Morocco due to high manufacturing costs, depreciating currency, and skyrocketing inflation.
In essence, it showed that, with an official rate fall of 83%, the Naira in Nigeria saw the largest rate of depreciation in 2023. Investors are reportedly hesitant to put money into Nigerian real estate because of the country’s high default rate on real estate deals and ongoing inflation, which affects the cost of building supplies.
Unexpectedly, Nigeria was also placed third because of high building costs—estimated at $1,700 per square meter—high inflation as of last December (28.92 percent), and increased currency fluctuations (83.66 percent YTD).
The study also said that Morocco and Botswana have the highest rankings for the attractiveness of their real estate markets. The foundation for this has been relative monetary stability, low rates of inflation, and cheaper building costs.
It also emphasizes how leasing activity in the commercial real estate industry and finance for greenfield projects may be impacted by currency performance. A restricted pipeline of development in the majority of markets might result from the devaluation of local currencies, which is anticipated to increase the cost of financing real estate projects on the continent.