How severely are high borrowing costs impacting the development of affordable housing in Nigeria?
The cost of borrowing, which can reach 28% to 30%, has further complicated efforts to develop affordable housing. Cheaper financing is essential to expanding supply.
How do you borrow at 28% or 30% and deliver affordable housing? You cannot. We need lower interest rates and improved access to bank financing for developers. Inflation affects virtually every stage of property development. Project costs can change significantly between the period of budgeting and actual construction, creating uncertainty around cash flow, pricing and delivery schedules.
What structural interventions are required from the government to alleviate these pressures?
The government must address the structural costs of property development. This includes providing cheaper titled land in satellite communities, simplifying the process of obtaining land titles and planning approvals, and improving oversight of essential building materials manufacturers. Such interventions would reduce development costs and make it easier to build homes that reflect the purchasing power of ordinary Nigerians.
How pronounced is the mismatch between housing demand and supply in urban centres like Lagos?
The mismatch is particularly evident in Lagos. Research by GTI indicates that properties priced below N15m account for less than 5% of available housing supply but approximately 55% of estimated demand. This imbalance is driven by the faster growth of property development costs relative to household incomes. Houses previously available for N15m or less have become increasingly difficult to find, even in less developed parts of the country.
What solutions do you propose to close this severe supply-demand gap?
We need greater government participation in mass housing delivery through public-private partnerships, particularly in satellite communities where land acquisition costs are relatively lower. Under this arrangement, the government could provide land and facilitate access to financing, while private developers deploy technical expertise, construction resources and project management capabilities. Escrow accounts and effective project monitoring would help strengthen accountability and protect public investment.
Developers must also embrace more efficient construction methods, including standardised designs, bulk purchasing of materials and improved building technologies. Affordable should mean smart and efficient, not substandard.
Where do you see the strongest investment opportunities in Nigeria’s real estate market given the current economic climate?
Beyond affordability, residential property remains the strongest investment segment. Housing is a relatively resilient asset because demand for shelter persists regardless of economic conditions. While businesses can postpone opening new outlets and consumers can defer hotel bookings, households cannot indefinitely postpone the need for accommodation.
For commercial investors, shopping malls and retail spaces present promising opportunities, driven by population growth and increasing demand for everyday services, including grocery stores, pharmacies and hospitality businesses.
Which specific geographical corridors are currently drawing the most attention in Lagos?
The Lekki-Ajah-Sangotedo corridor is one of the most attractive emerging investment destinations in Lagos, supported by ongoing road infrastructure projects. Developments like the Lekki-Epe Expressway expansion and the Lagos-Calabar Coastal Highway will reshape the area’s investment outlook.
However, roads alone are not sufficient. Drainage infrastructure, street lighting, CCTV installations and other security measures are vital. People don’t just buy a house; they buy a lifestyle, and they will pay for an area where they feel safe and comfortable.
What hinders institutional investors from committing capital to the Nigerian real estate sector?
Attracting institutional investors, pension funds and private equity firms remains difficult due to concerns about regulatory weaknesses and investment risks. Building collapses, disputed land titles, project delays and cases of developers disappearing with investors’ funds have weakened confidence. Strengthening regulation, enforcing construction standards, improving transparency and establishing credible oversight mechanisms are necessary to attract more institutional capital.
What advice do you have for individual property investors looking to navigate these risks?
Prospective buyers should engage registered land surveyors and property lawyers before committing funds. Surveyors establish geographical coordinates, verify boundaries and identify encroachments. Lawyers investigate title status at the Lands Registry, while town planners verify zoning compliance. Investors should also examine developers’ previous projects, visit completed estates and speak with existing residents.
What alternative financing structures could offset the lack of deep mortgage penetration?
We need a dedicated government-backed intervention fund for mass housing, similar to interventions previously introduced in the aviation, power and agricultural sectors. This fund should provide affordable loans to developers under strict monitoring. Properly structured financing could enable capable developers to deliver between 500 and 1,000 housing units, boosting supply and affordability.
On land administration, we advocate digitising land registries and processing Certificates of Occupancy within 30 days rather than up to two years. Furthermore, transaction and regulatory costs such as consent fees, registration charges, planning approval fees and development levies add between 15% and 25% to project costs and need review. Investors must also account for the increase in capital gains tax on property disposals and transfers to 30% introduced in January 2026.
How can real estate firms insulate themselves against economic shocks?
Companies must diversify revenue sources beyond outright property sales. Facility management, brokerage, rental services, serviced apartments and building material supplies offer recurring revenue to sustain operations during weak sales periods. Drawing from The Smart Investor’s Guidebook, first-time investors must consider their financial capacity, investment horizon and liquidity requirements. Property investment requires substantial upfront capital and patience. Over the next five years, greater buyer awareness, increased institutional participation, structured mortgage financing and technology adoption will define the sector.