By Maduka Nweke
Sixty-five years after independence, millions of Nigerians remain tormented by a massive housing deficit, a disgraceful development experts say should not be found in a resource-rich country like Nigeria.
The horror is blamed on decades of poor governance, corruption, weak policies and neglect that have left millions without decent shelter.
With an estimated shortfall of over 28 million housing units, the country’s dream of affordable homes for all remains a far-flung dream.
The deficit is driven by a population of more than 220 million people, with an annual urbanisation rate of nearly 4 per cent, the fastest in Africa. Demand is concentrated in major cities, where rising land costs and cumbersome registration processes make homeownership nearly impossible for low- and middle-income earners.
When Nigeria gained independence in 1960, the dream of nationhood came with lofty promises of development, including the provision of affordable housing for its citizens. At the time, housing shortages were already evident, but government interventions, though modest, were geared toward civil servants and urban elites rather than the broader population. The colonial administration had left behind a system that barely catered to the urban working class, while rural dwellers largely depended on self-built homes.
In the 1960s and 1970s, Nigeria’s oil boom provided the government with resources to expand housing schemes. The 1979 National Housing Policy sought to provide decent and affordable housing for all Nigerians by the year 2000. The idea was ambitious as the government was to directly construct housing estates in major cities and provide mortgage facilities through the Federal Mortgage Bank. However, poor execution, corruption,l and lack of continuity stalled the vision.
During military regimes of the 1980s and 1990s, Nigeria’s housing crisis deepened. Rapid urbanisation, spurred by rural-to-urban migration, swelled city populations far beyond infrastructure capacity. Lagos, Kano, Ibadan and Port Harcourt expanded rapidly, with informal settlements and slums mushrooming at the peripheries. Housing demand far outstripped supply, while mortgage access was limited to a privileged few. Land registration remained painfully slow, and bureaucracy, coupled with corruption, discouraged investment in housing.
With the return to democracy in 1999, housing was again placed on the national agenda. The Obasanjo administration introduced reforms to revive the mortgage system, promote public-private partnerships, and encourage estate development. Yet, implementation gaps persisted. Subsequent governments rolled out initiatives, including the National Housing Fund (NHF) and mass housing projects across states. Unfortunately, many estates either stalled, were overpriced for average Nigerians, or were abandoned altogether.
Real estate has nonetheless remained one of the country’s largest employers of labour, contributing significantly to GDP. However, the sector is characterised by fluctuating interest rates, limited mortgage penetration, and a tilt toward luxury developments that cater to the elite, while affordable housing remains neglected. Technology has begun reshaping the sector, with virtual tours and digital transactions becoming more common, while investments in logistics hubs, data centres, and suburban residential projects gain traction.
Experts say Nigeria’s housing story is one of missed opportunities, systemic inefficiencies and unfulfilled promises. From independence to date, governments have repeatedly pledged mass housing but failed to deliver at scale. Without drastic reforms in land administration, stronger mortgage systems, and genuine commitment to affordable housing, millions of Nigerians will remain trapped in the housing deficit nightmare, 65 years after independence.
The real estate sector struggles with fluctuating interest rates, chronically low inventory, and a growing shift toward suburban and secondary markets. Inventory levels have remained depressed, even as technology such as virtual tours becomes more central to property transactions, particularly with renewed interest in logistics, data centres, and residential properties.
The COVID-19 pandemic further disrupted the sector, ushering in new operational models while also heightening the need to guard against fraud. However, one of the biggest obstacles remains Nigeria’s notoriously cumbersome land registration process, ranked among the most inefficient globally. Registering property can take anywhere from six months to two years, requiring an average of 12 procedures and costing about 28.8 percent of a property’s value.
Concerns about governance and transparency in the industry also persist. The recent marking of 176 estates for demolition by the Lagos State Government underscores this, with critics arguing that it is difficult to believe such massive developments could have proceeded without official knowledge or oversight.
A blessed nation haunted by poor leadership
Nigeria is a country richly blessed with natural stability, spared from devastating disasters like earthquakes, tsunamis, or tornadoes. Yet, ironically, building collapses remain a recurring tragedy across the nation. This man-made crisis stems less from nature and more from systemic inefficiencies and negligence.
One major hurdle is the protracted and costly process of securing building approvals and land registration. The bureaucratic delays not only slow down projects but also pile unnecessary expenses onto construction costs. Added to this is the high price of cement, which in Nigeria is 30–40 per cent more expensive than in neighbouring countries and above global market averages.
Compounding the challenge is the absence of adequate public infrastructure. Developers often have to shoulder the burden of providing access roads, water, and electricity, costs that can increase overall project expenses by as much as 30 percent. The result is a housing environment where affordability remains elusive and quality is frequently compromised.
Scathing taxes
One of the biggest impediments to rapid growth in Nigeria’s real estate sector is the burden of multiple taxation. Investors are routinely subjected to a long list of levies, including development levy, income tax, building plan approval fees, property tax, and land use charges. In some cases, they are even asked to pay renovation taxes before upgrading existing properties.
This financial pressure is further compounded by Nigeria’s heavy dependence on imported raw materials and construction equipment. Taxes imposed on these imports directly inflate the cost of development, which in turn drives up the final market price of properties. Developers, eager to remain profitable, often pass these costs onto buyers, sometimes increasing overall property prices by 25 to 35 per cent.
Limited funding sources
Despite Nigeria’s vast potential for real estate investment, driven by a growing middle class, rising consumption, rapid urbanisation, and a youthful population, financing remains a stubborn obstacle. Developers struggle to secure adequate funding for projects, while prospective homeowners face daunting challenges in accessing affordable mortgage loans. The familiar problem of insufficient capital continues to stifle both investment and homeownership.
Quality concerns
Adding to these woes is the prevalence of unqualified builders and contractors in the industry. Many prioritise quick financial gains and mobilisation fees over engaging competent professionals who can ensure quality execution. This has not only undermined construction standards but also contributed to the recurring problem of building collapses across the country.
Land grabbing and touting
One of the most visible distortions in the real estate landscape is the existence of land grabbers and touts, popularly called “Omo-Onile” in Western Nigeria. Their influence has become an institutionalised nuisance.
They levy investors and builders at every stage of construction, from foundation to fencing, from gate erection to roofing, from plastering to painting. Even artisans and labourers are not spared, as levies are charged for every truckload of sand, cement, or gravel transported to the site.
These practices inflate costs and frustrate developers. “All these are enough reasons to frustrate anybody who wants to invest in real estate,” lamented one developer.
The unregulated activities of Omo-Onile not only discourage investment but also add layers of inefficiency that ripple through the sector, inflating housing prices and worsening the affordability crisis.
Experts’ dilemma
For industry experts, the housing conundrum is both a story of modest progress and lingering gaps. Chudi Ubosi, Principal Partner at Ubosi-Eleh Surveyors, offered a balanced assessment:
“I think Nigeria has performed fairly in the real estate sector as we celebrate 65 years of independence. Particular areas include the provision of housing by the Federal & State Governments at various levels. However, a lot still needs to be done. We need a lot more building controls to stem the collapse of structures. The Land Use Act needs to be reviewed to make it align with modern realities & aspirations. Possible standardization of materials to make local manufacturing easier to create bigger markets is of utmost importance. We need to ease access to finance both for construction & the end users, the purchasers (mortgages). There is so much more that needs to be done to enable the dream of millions of Nigerians in owning their homes come true.”
Ubosi’s comments reflect the frustrations of many stakeholders who believe policy and regulatory reforms are overdue.
For Engr. Lawal Razaaq, a former Director at the Nigerian Building and Road Research Institute (NBRRI), the fundamentals of the market remain strong despite glaring challenges.
“Nigeria’s real estate sector is poised for significant growth in 2025. This is driven by rapid urbanization, a burgeoning population, and increasing demand for housing. Despite economic challenges, real estate remains a resilient and profitable investment, offering long-term financial security and wealth accumulation,” he said.
With a population of over 220 million projected to surpass 400 million by 2050, demand for shelter will only grow. Urban centres like Lagos, Abuja, Onitsha, Ibadan, and Port Harcourt continue to swell with new migrants, further stretching infrastructure and housing supply.
According to the National Bureau of Statistics (NBS), real estate grew by 5.3 percent in Q3 2024, making it the third-largest contributor to GDP, surpassing oil and gas. In prime Lagos neighbourhoods such as Ikoyi, Victoria Island, and Lekki, property values rose by an average of 15 percent in 2024. Rental yields in areas like Yaba and Ikeja GRA range between 6 and 12 percent annually, according to Estate Intel.
This resilience explains why real estate remains a hedge against inflation and a reliable wealth-preserving asset in Nigeria’s volatile economy.
Policy push
The federal government, under the Renewed Hope Cities and Estates Programme, has promised to tackle the housing deficit head-on. The Minister of Housing and Urban Development, Ahmed Dangiwa, has repeatedly stressed the importance of foreign investment in bridging the gap.
The programme aims to deliver thousands of affordable housing units nationwide, backed by infrastructure development and financing reforms. But for critics, promises have been made before—Jakande’s mass housing estates in the 1980s, the “Housing for All” pledge of 2000, and other stalled projects are reminders of policy inconsistency.
Moses Ogunleye, Managing Director of MOA Planners Limited, argued that Nigeria has failed to fully exploit real estate’s potential.
“We have still not taken effective advantage of the sector. The real estate sector has faced several challenges that have debarred its growth. The key ones are low capacity/capitalisation of the operators in the industry, relative uncertainty in the investment climate, and weak government policy. The sector would have thrived better if it had large organisations that could raise capital or fund for investment in the residential and commercial real estate market. For example, we do not have a real estate company that can build between 250 and 500 housing units in Nigeria in a year.”
For Ogunleye, Nigeria must treat real estate as a “cash cow” industry capable of generating jobs and wealth if properly structured.
Transparency, data drought
Dr. Chiedu Nweke, Chairman of Periwinkle Residences Limited and Chief Executive Officer of Swampsea Construction, noted that the market’s growth potential is hampered by opacity.
“One of the factors that motivate investors is the ease of converting their investments to cash whenever the need arises. Unlike most other markets, investors can have a hard time finding statistics with basic information such as deal prices, supply, leasing activity, and property ownership. In Nigeria, it takes months or years to convert a real estate investment to cash.”
This lack of data transparency reduces investor confidence, slows transactions, and prevents the sector from attracting global capital at scale.
Engineer Funmilade Akingbagbohun, former National Chairman of the Nigerian Institution of Mechanical Engineers, believes the sector is expanding but under constant strain.
“The real estate sector has grown by 6–8 per cent with the construction industry expanding due to the real estate market. Key drivers are government policies, infrastructure investments, and housing demand. But rising construction costs, inflation, and currency fluctuations pose challenges. Regulatory bottlenecks in land titling and approval processes also hinder growth.”
He stressed that developers are forced to “engineer around systemic failures”—such as unreliable power supply and poor road networks—by building boreholes, buying generators, and self-financing infrastructure. This drives up costs by as much as 30 percent, making affordability elusive.
For Godwin Alenkhe, National President of the Estate Rent and Commission Agents Association of Nigeria (ERCAAN), Nigeria’s housing record is a tale of missed opportunities.
“Nigeria’s housing policies have had mixed results, from the Lateef Jakande administration’s efforts to provide affordable homes in Lagos to the unfulfilled ‘Housing for All’ initiative in 2000 and the current Renewed Hope housing estate promise. The lack of effective planning, regulation, and stakeholder involvement has hindered the sector’s growth.”
Alenkhe urged the government to collaborate with professional associations like ERCAAN in policy design and execution. “This collaboration would foster trust and confidence among investors,” he argued.
Diaspora angle
According to Akin Opatola, Chapter President of FIABCI Nigeria, diaspora remittances and youthful demographics are reshaping demand.
“Despite economic headwinds, factors such as rapid urbanisation, diaspora investment, and a youthful population continue to fuel demand across residential and commercial segments. That said, key structural challenges remain, including regulatory bottlenecks, infrastructure deficits, and limited access to long-term finance.”
He noted that the creation of the Ministry of Finance Incorporated Real Estate Investment Fund could be a game-changer if transparently implemented.
At 65, Nigeria’s real estate sector is both a symbol of resilience and a reminder of lost opportunities. On one hand, property values are rising, rental yields are strong, and investor appetite remains high. On the other, millions of Nigerians are priced out of homeownership, building collapses continue, and systemic failures frustrate developers.
From the menace of Omo-Onile to multiple taxation, from opaque markets to poor financing, the sector is weighed down by bottlenecks that demand urgent reform. Yet, with the right mix of policies, partnerships, and transparency, real estate could become the true cornerstone of Nigeria’s non-oil economy.
The dream of homeownership for millions of Nigerians remains alive, but it will require more than promises; it demands action, vision and accountability.
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