How Real Estate Overtook Oil in Nigeria— Insights for Construction Industry

Introduction: A Shift That Rewrites the Economic Script

In a development that marks a significant departure from decades of oil-led economic structure, Nigeria’s rebased Gross Domestic Product (GDP) figures have placed real estate ahead of crude oil as the third-largest contributor to national output.

According to a recent Premium Times report, updated figures from the National Bureau of Statistics (NBS) reveal that the real estate sector now contributes ₦41.2 trillion to Nigeria’s GDP—representing 10.78% of the country’s total economic output. For comparison, the contribution of crude oil and natural gas stands at ₦14.6 trillion, or 5.85%.

This isn’t just a statistical quirk—it’s a moment of reckoning for stakeholders in the construction industry, property development, and investment ecosystem.

What explains this reversal of roles? And more importantly, what can we learn from it?

This article unpacks the deeper revelations behind the numbers and outlines the lessons that construction professionals, property investors, and project owners should internalize to navigate a rapidly evolving landscape.

Understanding the Data—Real Estate’s Rise to the Top

The Big Picture

The GDP rebasing by the NBS adopted 2019 as the new base year, allowing for a more accurate reflection of economic realities. Previously, the contributions of informal housing development, rental incomes, and fragmented construction activities were largely underreported.

The revised figures reveal:

• Real estate now contributes ₦41.2 trillion (10.78%) to GDP.

• Crude oil and natural gas now contribute ₦14.6 trillion (5.85%).

• Trade and crop production remain top contributors, but real estate now surpasses telecommunications and has moved into third place.

In Q1 2025 alone, real estate recorded a nominal growth rate of 18.08%, with its share of nominal GDP reaching 17.4%, up from 8.73% in Q4 of the previous year.

These are not random spikes—they are rooted in fundamental shifts.

Why the Real Estate Sector is Booming

A Surging Population and Urbanization

Nigeria’s urban population is exploding, creating a sustained demand for housing. An estimated 700,000 new homes are needed every year to reduce the country’s housing deficit, which currently stands at over 28 million units.

From Lagos to Abuja, and from Enugu to Jos, the story is the same—more people are moving into cities, but the housing stock is not keeping up.

Diaspora Capital is Coming Home

Increased inflows from Nigerians abroad are helping to finance residential and commercial property projects. These investors are motivated by rising real estate returns, currency hedging opportunities, and a desire for long-term assets in their home country.

Many have turned to trusted construction partners to manage projects from afar—often demanding transparency, accountability, and adherence to global construction standards.

Informal Activity is Now Accounted For

The rebasing of GDP gave the economy a new lens—capturing informal estate transactions, self-built housing, small and medium-scale construction activity, and rental services that had gone uncounted.

This means the true economic weight of construction and real estate has finally been brought into view.

4. Devaluation of Oil Revenues

Global demand for oil is changing. Even though oil remains a key foreign exchange earner, its share in GDP is declining. This shift has allowed real estate to climb into a central role—especially as it offers stable, long-term value.

What This Means for the Construction Industry

The implications of this transformation are far-reaching. The construction industry, being the engine behind all physical development, must now evolve from simply executing projects to strategically shaping urban growth.

Construction Is No Longer Peripheral—It’s Foundational

With real estate commanding more GDP share than oil, every construction activity now sits closer to the core of national economic growth. Projects will no longer be viewed as just physical achievements—but as economic contributions with measurable impact.

“Every square meter you build is now a GDP input,” as one economist aptly put it.

Demand Will Become More Sophisticated

As investment into real estate grows, so too will the expectations for quality, compliance, and transparency. First-time homebuyers, institutional developers, and diaspora clients will demand more professionalism in service delivery.

Projects must now meet higher standards of:

• Sustainability

• Documentation

• Cost-efficiency

• Timeline discipline

Compliance and Formalization Are Gaining Traction

The rebasing also signals that the government is paying attention to the sector. Land documentation, building approvals, and environmental assessments are gradually becoming prerequisites for project financing and valuation.

Operators in the construction industry must upgrade their internal systems to reflect these expectations.

Key Lessons for Developers, Investors, and Contractors

To maintain and accelerate growth, operators across the value chain must embrace both strategic thinking and ethical execution.

Build with Purpose

The best-performing real estate investments going forward will not be speculative luxury estates, but needs-based developments—starter homes, multi-family apartments, and mixed-use clusters that serve real demand.

Construction companies should anticipate these needs and develop scalable, modular solutions that can be customized for location and income level.

Don’t Cut Corners—It’s Now Publicly Visible

With real estate now in the national economic spotlight, cutting corners has higher reputational and economic risks. Faulty buildings, failed contracts, and undocumented practices can no longer remain hidden in the informal sector.

Smart firms are investing in:

• Documented procurement processes

• Quality assurance systems

• Clear construction timelines

• Post-project support

These practices are increasingly valued by both clients and regulators.

Technology is Your Accelerator

From drone surveys to virtual walkthroughs, digital tools are redefining how construction is planned, monitored, and delivered.

Operators who embrace:

• BIM (Building Information Modelling)

• Digital procurement tools

• Customer communication portals

…will have a competitive edge, especially among diaspora and corporate clients.

Sustainability is a Must-Have, Not a Luxury

As Nigeria battles climate challenges—flooding, heatwaves, soil degradation—there is growing awareness that every building must now be resilient and resource-efficient.

This calls for:

• Passive cooling designs

• Rainwater harvesting systems

• Solar-ready structures

• Eco-friendly construction materials

Long-term savings and reduced operational costs make sustainable buildings more attractive to serious investors.

The Way Forward—A Call for Strategic Collaboration

The evolving real estate and construction landscape demands deeper collaboration between:

• Landowners and developers

• Contractors and architects

• Regulators and private sector players

• Financiers and technology providers

Everyone involved must see the sector not just as a cash cow, but as a strategic lever for national development.

It’s also a time to push for more inclusive development—projects that serve all income levels, from social housing to commercial real estate.

Conclusion: Building in the Age of Visibility

The numbers don’t lie—real estate has overtaken oil as Nigeria’s third most important sector by GDP contribution. And it did so by quietly absorbing years of informal growth, capital investment, and practical response to social need.

For operators in the construction industry, this is a validation of their role—and a challenge to rise higher.

The future belongs to firms that are:

• Data-driven

• Customer-conscious

• Tech-enabled

• Compliance-ready

• And quality-obsessed

Those that see construction as more than cement and steel—but as nation-building, value creation, and economic empowerment—will be the ones to thrive in this new era.

Conifer Konstruktion (Nig) Ltd has a project delivery track record of 60+ projects. Contact us via email (okoyeebubedike@coniferkonstruktion.com.ng) or phone (803) 404-0894, and we’ll make sure you’ll have a  stress free construction experience.