Nigerians in the diaspora are seizing the opportunity of the depreciation of the Naira and favorable lending rates in their countries of residence and taking a bet on real estate assets in Nigeria.
Diaspora-led investments in Nigeria’s real estate and construction sectors is helping to ease the current finance gap plaguing both sectors. As resident Nigerians bite hard in the face of macroeconomic headwinds, Nigerians in the diaspora are seizing the opportunity of the depreciation of the Naira and favorable lending rates in their countries of residence and taking a bet on real estate assets in Nigeria.
More than one-third of the total diaspora remittance inflows to Sub-Saharan Africa, an estimated $5.1Bn in the first quarter of 2022, came to Nigeria. Remittances of Nigerians living abroad accounted for 6.1% of Nigeria’s GDP in 2021, four times higher than Nigeria’s foreign direct investments in the same year. As migration numbers continue to climb, an upward trend in diaspora remittance can be expected. How much of this important revenue and financing source can the real estate and construction sectors hope to attract? The appreciation potential of real estate assets in Nigeria’s major cities positions the market as an investment haven, with the residential, retail, hospitality, and industrial markets identified as beneficiaries of ‘fresh’ diaspora capital.
In partnership with the Federal Mortgage Bank, the Nigerians in Diaspora Commission has launched a housing scheme that promotes loan accessibility, mortgage discounts, and transparency for the diaspora population interested in buying or building their homes. In spite of the low rental return associated with the fallen Naira, the capital appreciation potential of real estate assets in prime locations remains a driving force for savvy diaspora investors and developers.