The Impact of Interest Rate Fluctuations on Real Estate Investment in Nigeria
Year: 2025
Type: article
Abstract: This study investigates the impact of interest rate fluctuations on real estate investment in Nigeria between 2010 and 2024. The study draws on investment theories, the loanable funds theory, and Keynesian perspectives to examine how changes in interest rates influence real estate development, mortgage uptake, and sectoral growth. Using secondary data from the Central Bank of Nigeria (CBN) and the National Bureau of Statistics (NBS), the study employed descriptive trend analysis and econometric modeling through the Autoregressive Distributed Lag (ARDL) framework. The findings reveal that higher interest rates significantly reduced real estate investment, while Treasury bill yields crowd out private capital inflows. Inflation and exchange rate volatility exacerbate the negative impact, while mortgage financing remains underdeveloped. The study concludes that interest rate fluctuations are a critical determinant of investment trends in Nigeria’s real estate sector and recommends stabilizing interest rates, strengthening mortgage finance, and enhancing policy coordination to support sustainable housing investment.
Author: Mohammed, Badamasi Idris
Language: English
Topic: Housing Market and Economics
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7084615232
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