Nigeria’s real estate sector is gearing up for a transformative leap, with the Federal Government projecting it will hit a staggering market volume of ₦2.25 trillion by 2025.
Despite formidable challenges such as volatile exchange rates, inflationary pressures, and the persistent issue of housing affordability, optimism remains strong about the sector’s future.
Real estate has consistently served as a vital pillar of Nigeria’s economy, contributing significantly to the nation’s Gross Domestic Product (GDP). However, the sector is grappling with Nigeria’s surging inflation rate, recently reported by the National Bureau of Statistics at over 34 percent.
This spike in inflation has placed immense pressure on developers, making it increasingly difficult for the average Nigerian to afford a home. Additionally, fluctuating exchange rates have exacerbated the cost of construction materials, over 90 percent of which are imported.
Speaking at the Saudi Arabia Real Estate Forum held in Riyadh, Nigeria’s Minister of Housing and Urban Development, Ahmed Dangiwa, highlighted the immense growth potential within Nigeria’s real estate market. He noted that the sector contributed approximately 5.2 percent to Nigeria’s GDP in 2024 and is expected to surpass ₦2 trillion by the end of 2025. Dangiwa drew attention to Nigeria’s massive housing deficit, estimated at 28 million units, a figure driven by rapid urbanization and population growth. Despite this daunting challenge, he emphasized the vast investment opportunities that exist, particularly within the residential real estate segment.
Dangiwa underscored the importance of strategic partnerships to tackle Nigeria’s housing crisis. The government is focusing on large-scale housing developments through public-private partnerships, innovative financing solutions, and collaboration with state governments to unlock land for affordable housing projects. These efforts aim to bridge the gap between housing demand and supply while boosting the sector’s contribution to the economy.
Addressing the issue of affordability, Dangiwa highlighted government initiatives designed to ease the financial burden on prospective homeowners. One key measure includes the recapitalization of the Federal Mortgage Bank of Nigeria with ₦500 billion, aimed at providing more accessible, single-digit interest mortgage products. Additionally, the government is exploring new funding models, such as Real Estate Investment Funds, which target mortgage interest rates around 12 percent significantly lower than the current market rates of 28-30 percent. These funds are designed to offer financial security to both developers and homebuyers.
To further improve homeownership accessibility, rent-to-own schemes are being introduced, offering flexible payment structures that cater to a wider demographic. Dangiwa also mentioned ongoing collaborations with the Nigeria Governors’ Forum to streamline land acquisition and approval processes, reducing bureaucratic bottlenecks and creating a more conducive environment for real estate development.
Through these comprehensive strategies, Nigeria’s real estate sector is poised to become a major driver of economic growth. Beyond providing much-needed housing, the sector is set to stimulate investments, generate employment opportunities, and contribute to sustainable development across the country.
