Openness and Attractiveness of Real Estate Markets in Emerging Economies: Empirical Analysis of the Nigerian Real Estate Market

Purpose: This study examined the openness and attractiveness of the Nigerian real estate market by analyzing the effects of macro-economic variables on the real estate sub-sector of the Nigerian economy.Design/Methodology: Secondary data were utilized for the study. Quarterly data on the real estate contribution to GDP, economic outlook, business confidence and the business constraints affecting the confidence level of investors such as inflation rate, interest rate and exchange rate were obtained from the databases of the National Bureau of Statistics and the Central Bank of Nigeria from 2008 to 2017. The data were analysed using econometric tools such as unit root test and dynamic ordinary least square (DOLS) which is a co-integrating model.Findings: The results of the analysis showed that economic outlook and business confidence has a negative influence on the real estate contribution to GDP. Also, interest rate as a business constraint exhibited a negative effect on the real estate sub-sector of the GDP. Both business confidence and exchange rate displayed positive but not statistically significant relationship with the real estate sub-sector.Research Limitations: This study is limited by the unavailability of data for a longer span. The availability of data on some of the variables analysed beyond 2008 could have improved the findings of the study.Practical Implications: This paper has implications for institutional and international investors participating or contemplating investment decisions in the Nigerian real estate market.Originality/Value: This paper highlights the openness and attractiveness of the Nigerian real estate market and provided information that could enhance the flow of foreign direct investment in the market.