Amid High Inflation, Nigerian Real Estate Firms Secure N2.26trn Loans in Eight Months
- Nigerian real estate companies borrowed a total of N2.26 trillion in 8 months
- The money was used to fuel real estate operations in the country during the period
- CBN data showed that loans to real estate companies increased from N712 billion to N755 billion within the period.
According to data from the Central Bank of Nigeria, the country’s real estate and construction companies successfully obtained loans totalling N2.26 trillion in just eight months.
The money borrowed from banks served as capital to increase the range of services offered in the industry.
The loans obtained between November 2022 and June 2023 went from N1.90 trillion to N2.26 trillion, an increase of 18.9%, according to Punch report.
Source: Getty Images
Construction businesses acquired even more spectacular credit facilities
The apex bank earlier decided to raise the benchmark interest rate from 11.5% earlier this year to 18.75% in June, covering eight consecutive rate hikes.
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This was part of its initiatives to lower inflation and remove cash from circulation. Despite this decision, the new figure still stands.
The construction business acquired even more spectacular credit facilities at N1.51tn. At the same time, the real estate sector obtained loans for N755bn, according to the Central Bank of Nigeria’s Sectoral Analysis of Deposit Money Banks’ Credit.
According to CBN data, loans to real estate companies increased from N712 billion to N755 billion, or 44.4%, while loans to construction companies increased from N1.19 trillion to N1.51 trillion.
According to a breakdown by month, N1.80 trillion was borrowed in December, N1.78 trillion in January, N1.82 trillion in February, N1.84 trillion in March, N1.88 trillion in April, and N1.84trillion in May.
Numbers tracked by Legit.ng showed that in November 2022, the headline inflation rate was 21.47%. By June 2023 however, the number rose to 22.79%.
Financial Analyst, Charles Abuede noted that the impact of this surge in inflation on Nigerians is significant and multifaceted.
Primarily, he said high inflation erodes the purchasing power of individuals, as it means that the value of the Nigerian Naira diminishes.
"Consequently, it takes more Naira to acquire the same goods and services, resulting in reduced purchasing power and the ability to buy fewer items with the same income."
Meanwhile, in an earlier report, Lagos, Nigeria’s commercial metropolis, emerged as the most costly city to build a home.
Lekki Mall, 3 Other Eye-Catching Properties Up for Sale As Novare Begins Plan To ‘Leave’ Nigeria
Earlier, Legit.ng reported that one of Nigeria's leading institutional investors and developers, Novare Real Estate Nigeria Limited (NREN), announced plans to sell some of its eye-catching properties.
The properties, which include Lekki Mall, Apo Mall Abuja, Novare Central Mall, and Gateway Mall, are located in Lagos and Abuja.
Novare has a decade of experience in property development and management across Nigeria and other countries in Sub-Saharan Africa.
Source: Legit.ng
