How real estate displaced crude oil as Nigeria’s third largest GDP contributor

Nigeria’s real estate sector has overtaken crude oil and natural gas as the third largest contributor to the country’s Gross Domestic Product (GDP), following the rebasing of GDP to 2019 base year by the Nigeria Bureau of Statistics, (NBS).

According to the GDP report published by the NBS on Monday, the contribution of real estate to the economy rose from N22 trillion (6.24 per cent) under the previous estimates to N41.2 trillion (10.78 per cent) in the 2024 rebased data, which placed the sector just behind crop production and trade.

The rebasing exercise, which updates a country’s data to mirror its current conditions and changing circumstances, revealed that crop production and trade remain the top two contributors to Nigeria’s GDP with N61.9 trillion (17.58 per cent) and N67.9 trillion (17.42 per cent) respectively.

Meanwhile, telecommunications also solidified its position as the fourth largest contributor at N25.4 trillion (6.78 per cent), while crude petroleum and natural gas dropped to fifth position with N14.6 trillion (5.85 per cent) contribution to the GDP, from its previous third position, prior to the GDP rebasing exercise.

Real estate, as the third largest Nigeria economy, accounted for 10.78 per cent of the GDP, which NBS attributed to better coverage of the real estate informal sector.

“By ranking the GDP estimates at the 2019 base year, real estate ranked third displacing crude oil and natural gas to the fifth position,” the report stated.

“This is due to better coverage of the real estate informal sector. The top five activities are crop production (17.58%), trade (17.42%), real estate (10.78%), telecommunications (6.78%),” it added.

Q1 Performance

The report showed that the real estate sector in Q1 2025 grew nominally by 18.08 per cent and contributed 17.4 per cent to GDP, with a sharp rise from the previous quarter growth of 8.73 per cent.

In real terms, for the first quarter of 2025, the real estate sector also contributed 13.30 per cent to the GDP, up from 13.11 per cent for the same quarter of 2024.

The significant housing deficit in Nigeria continues to drive increased demands for housing which is evident in the real estate performance of the rebased GDP.

This marks a shift from the previous dominance of oil and gas, signaling a new trend where real estate is emerging as a part of the key drivers of the Nigerian economy.

Speaking to PREMIUM TIMES about the new development Tuesday morning, Faji Tobiloba, Business Executive and Project Lead at Besitz Group, stated that the sector is booming as a result of concurrent demands for accommodation amidst housing deficit in the country.

Mr Faji revealed that Nigeria “has over 28 million housing deficit”, hence 700,000 new homes must be built annually to cater for the shelter needs in the country in the short to medium terms.

“The reasons are not far-fetched. To a large extent, there is an estimated value of over 28 million housing deficits in Nigeria, so based on the calculations, we need to provide 700000 new homes annually to address housing deficits we are currently experiencing.

“Practically, that’s almost impossible, looking at it, how many developers do we have? How many individuals in the real estate industry have capacity to match these needs? The idea is people need houses, accommodation, shelter and roof over their heads, that is the reason the real estate sector is surging,” he said.

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The real estate consultant also added that the sector is a bubble that will not burst, citing increasing demands for tourism, vacation and migration.

“The sector will always surge, not negatively. A simple analogy is that as young people that have parents and siblings, you will leave your parents’ houses to establish a family which will require that you move into a new house, then, you will raise kids that will go in the same pattern, so the need for accommodation and shelter can never be terminated.

“There will always be a demand for housing, beyond previous examples, there are people migrating into the country, people migrating from one state to another; they will need shelter either temporarily or for permanent residence, which is also increasing the surge in the real estate sector.

“Some said real estate is a bubble that will burst, but the sector is a bubble that will never burst, because the demand for real estate will always keep improving, they will keep moving from rural to urban areas, for vacation, tourism, greener pastures or permanent residence, and the sector can accommodate these people,” Mr Faji added.