By Blessing Clement 21/06/2023

Subsidy reduction has recently triggered heated discussions and arguments in Nigeria's numerous industries. The real estate sector is one in particular that would probably be greatly impacted by the elimination of subsidies. It is critical to consider how the Nigerian real estate market might be affected by the removal of subsidies in 2023 as the government moves toward economic reforms.

• Cost of Construction Will Increase: It is anticipated that the price of construction supplies including cement, steel, and other building materials will increase as a result of the elimination of subsidies. Real estate development projects will become more expensive as a result of this cost increase. It will be difficult for developers and builders to strike a balance between expenses and profit margins, which could cause development projects to be delayed or housing prices to rise.
• Rise in property price: The withdrawal of subsidies could lead to inflationary pressures, which could have a major effect on the real estate market. A rise in home prices could result from higher building costs and rising living expenses. Prospective homeowners may find it more difficult to afford homes due to the price increase, especially those in the middle- and lower-income income brackets. It might also slow down the pace of real estate  sales and transactions, thus causing a slump in the market.
• Change in Investment Patterns: For many Nigerians, real estate has long been regarded as a secure investment option. Investors may change their investment plans, though, if subsidies are eliminated. Some investors may turn to alternate investment options like stocks, bonds, or other areas of the economy due to the rising expenses and market uncertainty. This change in investment behavior may have an effect on the real estate  industry's overall expansion and development.
• Focus on Affordable Housing: There may be a change in emphasis in affordable housing programs since the withdrawal of subsidies may make homeownership more difficult for the typical Nigerian. To meet the housing demands of the majority of the population, the government and private developers may be forced to prioritize the building of affordable housing units. The public and private sectors may work more closely together as a result of this change in emphasis to address the problem of housing affordability.
• Opportunities for Innovation and Sustainability: The elimination of subsidies poses difficulties, but it also creates chances for innovation and sustainability in the real estate  industry. To offset the increasing expenses, developers could look into alternate building techniques, materials, and energy-efficient designs. In addition, as a reaction to rising energy prices, there might be a greater emphasis on green structures and sustainable activities. With a long-term positive effect on the environment and advantages for both developers and homeowners, sustainable development is becoming more popular.

The removal of subsidies in Nigeria in 2023 is expected to have a significant impact on the real estate  sector. Increased construction costs, rising property prices, and shifting investment patterns are some of the challenges that the industry may face. However, this situation also presents opportunities for innovation, affordability, and sustainability. It will be crucial for stakeholders, including the government, developers, and investors, to adapt to these changes and find ways to navigate the evolving landscape of the real estate  market in Nigeria.