A recent report has highlighted the absence of regulatory incentives for local building material production as a major housing crisis factor.
The report stated that Nigeria remains dependent on imported construction materials, leaving the industry vulnerable to inflation and exchange rate fluctuations.
Localising tile, roofing sheet, and cement production could stabilise costs, improve affordability, and enhance housing sector resilience.
Government Policies and Affordability Challenges
The report acknowledged government policies aimed at improving housing affordability through initiatives like Family Homes Fund and National Housing Fund.
However, bureaucratic bottlenecks, limited funding, and transparency issues have hindered the effectiveness of these housing finance programmes.
Rising inflation has worsened affordability challenges, as mortgage rates and property prices significantly outpaced income growth.
Many families now downsize, delay homeownership, or struggle with increasing rental costs due to economic pressures.
Changing Housing Preferences Amid Inflation
The report noted that inflation is shifting buyer preferences toward smaller, cost-effective housing units like studio apartments and shared housing.
Demand for suburban and peri-urban housing is growing, as these areas offer more affordable rental and purchase options.
Luxury residential properties, once dominant in Nigeria’s real estate market, are experiencing slower sales as the affluent buyer pool shrinks.
Developers are now diversifying into mid-income and affordable housing to meet shifting market demand.
Economic Challenges and Inflation Impact
Nigeria’s inflation crisis in 2024 was driven by fiscal policies, monetary trends, and exchange rate instability.
The naira depreciated 24.3% against the dollar, from ₦1,413:$1 in January to ₦1,757:$1 by November, its weakest level in over two decades.
This currency volatility placed significant strain on households, businesses, and the real estate sector, affecting affordability and housing demand.
Inflation led to higher construction costs, disrupted demand patterns, and shifting buyer behaviors, according to the report.
Opportunities for Innovation in Housing Sector
Despite inflation’s challenges, developers are embracing cost-saving technologies to maintain affordability without compromising quality.
Modular construction and prefabricated materials are reducing construction time and expenses while improving efficiency.
The adoption of solar panels, energy-efficient designs, and smart home technologies is increasing as tenants seek long-term cost savings.
The report emphasized that housing innovation, local material production, and policy reforms are critical to addressing Nigeria’s affordability crisis.
