Banking Sector Development and Real Estate Growth in the Nigerian Emerging Economy

Abstract

The housing sector is very essential in each country's welfare, given that it directly impacts on the well-being of the community and the performance of other economic sectors. This study estimates the long term causation between banking sector development and real estate growth in the Nigerian emerging economy from 1990 - 2018, hypothesizing no causation between banking sector and real estate growth. Applying the autoregressive distributed lag (ARDL) model and vector error correction model (VECM), the study establishes that banking sector and real estate growth in Nigeria are related. It implies, long run relationship exists between banking sector and real estate growth in Nigeria. The results show that causality is absent between banking sector and real estate growth in Nigeria. The findings give reasons to establish the banking sector using proper macroeconomic, legal and regulatory policies to boost real estate growth by introducing motivating systems that funnel more funds to real estate investment. The research reveals that banking sector development contributes insignificantly to real estate growth in Nigeria.