Overview of the African Real Estate Market: An Expert Opinion

ESV Peter Nwankwo

Africa is the world’s second-largest and second-most-populous continent after Asia. Available statistics show that Africa has a population figure of 1.4 billion people as of 2021, accounting for about 18% of the world’s growing population.

Premised on the foregoing facts and figures, Africa will remain a very key continent for real estate investment activities.  In recent years, the real estate market in Africa is experiencing uncommon growth and development across its value chain. The need for the development of modern and smart houses, the regional approaches to addressing housing needs across the continent and many other reasons are responsible for the positive growth trajectory recorded in the African real estate space.

In line with the housing policies of many African countries which are strategically aligned with the Sustainable Development Goals (SDGs), there is a growing trend in sustainable and eco-friendly housing development as Africans and investors in Africa are becoming more conscious of the need to develop eco-friendly houses for the overall and sustainable developments across the continent. This is one of the major reasons for the increasing investment in the African real estate space.
On the inflow of foreign investment to the African real estate market, a market huge enough to attract good foreign investments. Stable economic and political growth is now common among many African countries, and this has attracted both private and institutional foreign investments into the African continents. This positive development has led to massive construction of real estate projects, thereby contributing to the economic growth and development of the African continent.  The market is witnessing a rise in developments that has direct, now, and far-reaching benefits on the continent.

In a recent African real estate market survey by Statista, a leading global research, market data, and business intelligence agency, the African real estate market is growing most profitably and sustainably. By the end of 2024, the African real estate market is expected to reach a volume of $15.98tn. Within this market, the residential real estate dominates with a projected market volume of $13.39tn by the end of 2024.  It is anticipated that the market will experience an annual growth rate of 5.92% from 2024 to 2028, resulting in market volume of $20.11tn by 2028. This empirical growth, when compared to the global real estate market, China is expected to generate the highest value, with $135.70tn by the end of 2024.

The African real estate growth is being led by countries with stronger economic and political stabilities. Nigeria and Kenya are playing dominant roles in this regard.  The Nigerian real estate market is huge and has the potential for a continued growth trajectory.  In Kenya, the real estate market is experiencing a surge in affordable housing occasioned by urbanization.

To conclude, as an insider and a real estate professional, I can boldly say that the real estate market in Africa is experiencing growth due to several factors like, client preference in line with modern home designs, favourable macroeconomic factors in most African countries, aggressive foreign investments drives, rapid urbanization, a demographic advantage of very young population, among other factors.  In all, the real estate sector in Africa is gamed for further expansion in the coming years.

ESV Peter Nwankwo is a Lagos-based registered Estate Surveyor and Valuer. He is an expert in real estate financing and has over three decades of experience in the financial services sector.