The year 2024 was pivotal for Nigeria’s housing sector, marked by significant advancements under President Bola Ahmed Tinubu’s “Renewed Hope Agenda” and persistent challenges that underscored the need for sustained efforts.
With initiatives spearheaded by the Federal Ministry of Housing and Urban Development, led by Arc. Ahmed Musa Dangiwa, the sector made strides in addressing the housing deficit, improving urban development, and driving economic growth.
General Market Trends
The Nigerian real estate market in 2024 was projected to reach a value of $2.42 trillion, with residential real estate accounting for $2.08 trillion, the largest share. This is according to a report by Statista.
This significant growth reflects the sector’s potential as a key driver of economic development. However, Nigeria’s housing deficit, estimated at 28 million units and growing at 20% annually, remains the largest in Africa. This stark reality underscores the urgent need for aggressive and innovative solutions.
The Renewed Hope Cities and Estates Programme contributed significantly to the sector, aiming to deliver over 20,000 housing units annually. According to the Honourable Minister of Housing and Urban Development, Arc. Ahmed Musa Dangiwa, by year-end, 10,112 units will already be under construction across 14 sites nationwide, targeting various income levels with options such as Rent-to-Own schemes and installment payments.
Infrastructure development played a critical role in supporting housing projects. Government investments in transportation, energy, and water systems facilitated opportunities for new developments.
Yet, rising construction costs, driven by inflationary pressures, foreign exchange and high material prices, constrained developers’ ability to deliver affordable housing, exacerbating the demand-supply mismatch.
In 2024, high rent remained a significant financial burden for Nigerian households, with average annual rent for a one-bedroom apartment in Lagos reaching ₦1 million, in Abuja ranging from ₦800,000 to ₦1,200,000, and similar units in Port Harcourt costing between ₦400,000 and ₦800,000.
Nigerians spent an average of 40–60% of their income on rent, significantly exceeding the international benchmark of 30%, forcing many into overcrowded or substandard living conditions.
Key drivers of these high rents included inflation, increasing demand, and rising construction costs. Tenants also faced challenges like abrupt rent increases, limited legal protections, and discriminatory practices.
Despite these issues and high prices, cities like Lagos, Nigeria’s largest city, and Abuja, the nation’s capital, remained popular rental destinations due to their economic and political importance.
In 2024, the cost of building materials in Nigeria experienced a dramatic surge, with prices increasing by over 100% within the first two quarters. This sharp rise significantly impacted housing costs, particularly the price of high-yield cement, iron rods among others. This inflation put a strain on developers and prospective homeowners alike, making housing projects significantly more expensive.
Beyond price increases, widespread reports of substandard building materials emerged as a major concern. Many developers and builders complained of discrepancies in the quality and quantity of materials purchased, particularly cement and iron rods. For example, iron rods labeled and sold as containing a certain weight or volume (e.g., equivalent to a “9” size) were often found to contain significantly less (e.g., measuring as a “7” size when gauged). This practice poses a serious safety risk, as using substandard materials compromises structural integrity and has been identified as a contributing factor to building collapses, raising serious concerns for 2025 if left unchecked.
Mortgage Sector in 2024
Nigeria’s mortgage sector faced significant obstacles in providing access to homeownership. High interest rates (20-30%), limited access (only 3.5-5% of Nigerians), insufficient long-term financing, land allocation issues, bureaucratic delays, and poor infrastructure all contributed to making mortgages unaffordable and inaccessible for most citizens. These challenges created a bottleneck in the housing market, preventing many Nigerians from achieving homeownership.
The government implemented several initiatives to address these issues, including policies aimed at reducing interest rates, creating more accessible mortgage products, expanding the National Housing Fund, and providing land and infrastructure. While these efforts represent positive steps, substantial structural and systemic reforms are still needed to overcome the deep-seated challenges and create a more functional and inclusive mortgage market in Nigeria.
The Shadow Side of Nigeria’s Housing Sector in 2024: Demolitions and Building Collapses
Nigeria’s 2024 housing sector, despite growth and government initiatives, was significantly impacted by frequent building collapses and demolitions, especially in Lagos and Abuja. These collapses stemmed from substandard construction practices, including poor-quality materials, lack of code adherence, and insufficient supervision, exacerbated by rapid urbanization and overpopulation leading to unregulated development.
Regulatory challenges, such as weak enforcement and corruption, and natural disasters like flooding further contributed to structural failures.
The resulting demolitions caused loss of lives, economic hardship for property owners, social disruption through displacement, and erosion of investor confidence in Nigeria’s market.
In response, the government implemented measures like stricter regulations, enhanced oversight, sanctions, and public awareness campaigns. However, controversial demolitions in Lugbe, Abuja, by the FCTA, due to alleged illegalities, sparked further displacement, economic hardship, and legal battles, further damaging investor confidence, prompting calls from Housing Development Advocacy Network (HDAN) for transparent enforcement and improved urban planning for fair and effective governance.
The demolition of houses and structures in Lagos, while often necessary to address illegal developments and safety concerns, has significant implications for the housing sector. These demolitions can lead to displacement of residents, loss of property, and erosion of investor confidence.
To mitigate these negative impacts, the Lagos State Government should ensure transparent and fair enforcement procedures, provide adequate compensation to affected property owners, and develop comprehensive urban development plans to prevent future illegal developments.
Additionally, the government should invest in affordable housing initiatives to address the housing deficit and provide alternative housing options for displaced residents.
How major government housing and finance agencies influenced the sector in 2024?
In 2024, the Family Homes Funds Limited (FHFL) through its “Help to Own” scheme continued its efforts to address Nigeria’s affordable housing deficit, although its performance faced persistent challenges. While FHFL aimed to facilitate access to affordable homes for low- and middle-income earners through partnerships with developers and mortgage providers, progress was hampered by factors such as rising construction costs, inflationary pressures, and limited access to long-term financing.
Despite these obstacles, FHFL reported some progress in project delivery and mortgage origination, but the overall impact on closing the housing gap remained constrained by the broader economic and systemic issues affecting the Nigerian housing sector.
The performance of key housing institutions like the Federal Mortgage Bank of Nigeria (FMBN) was mixed but the bank continued to play a central role in Nigeria’s housing sector, focusing on providing mortgage finance to contributors of the National Housing Fund (NHF). Beyond its traditional role, the FMBN expanded its focus by issuing a N100 billion Bankable Offtakers Guarantee to a consortium of developers constructing houses nationwide under President Tinubu’s Renewed Hope Housing programme.
This strategic move, along with other innovative partnerships and reforms, signaled the FMBN’s commitment to driving affordable mass housing delivery and transforming the sector, despite ongoing challenges including limited funding, bureaucratic processes, and difficulties in land acquisition and titling.
Another critical issue that arose was the problem of single obligor limit at the Federal Mortgage Bank of Nigeria, where the Central Bank of Nigeria (CBN) restricted some mortgage banks from accessing the National Housing Fund. This development dealt a severe blow to the mortgage sector. Efforts by the new FMBN management, in collaboration with the Mortgage Banking Association of Nigeria (MBAN), sought to address the matter with the CBN. Eventually, the issue was escalated to the National Assembly for intervention.
On its part, the Federal Housing Authority (FHA) faced scrutiny regarding its performance in addressing Nigeria’s substantial housing deficit. While the FHA is mandated to develop and manage housing estates, its impact was limited by challenges such as funding constraints, bureaucratic bottlenecks, and land acquisition issues.
The FHA was charged to boost its performance by adopting more innovative approaches, including exploring capital market funding, to deliver housing on a larger scale. Despite these challenges, the FHA pursued some projects, such as the commissioning of an estate in Bwari, and explored technological advancements like drone technology to improve operational efficiency.
The Nigerian Mortgage Refinance Company (NMRC) also continued its efforts to deepen the mortgage market by providing liquidity to mortgage lenders. Notably, NMRC secured a significant $228 million in funding from the U.S. International Development Finance Corporation for Affordable Mortgage Financing as part of a $228 million Blended Financing Transaction Arranged by MiDA Advisors and Stanbic IBTC Capital, which is expected to boost its refinancing capacity and enable more Nigerians to access affordable mortgages.
This deal underscores international confidence in NMRC’s role in the housing sector and is projected to have a substantial impact on increasing homeownership rates. Beyond this landmark deal, NMRC focused on improving its operational efficiency and expanding its partnerships with primary mortgage institutions, although challenges such as high interest rates and macroeconomic instability continued to affect the overall mortgage market.
In 2024, a significant development in Nigeria’s housing sector was the launch of the Ministry of Finance Incorporated (MOFI) Real Estate Investment Fund (MREIF). This N250 billion fund aims to address the country’s substantial housing deficit by providing low-cost, long-term mortgages to Nigerians. By targeting single-digit or low double-digit interest rates, MREIF seeks to make homeownership more accessible, particularly for those who have been excluded by high interest rates in the past. The fund intends to operate with a market-driven framework, integrating pension funds and other financial sector resources.
While it is a relatively new initiative, MREIF represents a potentially transformative intervention in the housing sector, with the goal of not only increasing homeownership but also stimulating economic growth and job creation.
Factors Influencing the Sector
Public-private partnerships (PPPs) remained instrumental, with collaborations like the Shelter Afrique agreement to deliver 5,000 affordable housing units showcasing the potential of PPPs to address the housing deficit.
The government allocated ₦50 billion from the 2023 Supplementary Budget and ₦27.2 billion in 2024, though the Ministry called for ₦500 billion annually to meet ambitious targets.
Additionally, task teams were inaugurated to develop blueprints for addressing housing challenges.
Legislative and institutional reforms sought to tackle systemic issues.
The review of the Land Use Act aimed to reduce land disputes and administrative bottlenecks, while the establishment of building materials manufacturing hubs targeted lower construction costs.
Technology enhanced efficiency in the sector, with the Renewed Hope Online Housing Delivery Portal enabling over 47,000 Nigerians to apply for homes.
The inauguration of a steering committee for the development of a National Housing Data Center promised better policymaking and resource allocation.
Despite these efforts, affordability remained a critical issue. High costs of land and building materials, coupled with limited mortgage availability and high-interest rates, restricted access to housing for many Nigerians.
Frequent building collapses further raised concerns about construction quality and regulatory enforcement.
Impediments to Affordable Housing
The high cost of land and building materials significantly impacted affordability, pushing homes out of reach for most Nigerians.
Poor infrastructure in certain areas discouraged investment, limiting the availability of suitable housing.
Mortgage finance presented mixed outcomes. While some financial institutions expanded their offerings, high-interest rates and strict lending criteria made homeownership unattainable for low-income earners and first-time buyers.
Poor housing finance policies further compounded these issues, leaving many Nigerians without viable financing options.
Frequent incidents of building collapses undermined confidence in the sector, highlighting the need for stricter regulatory enforcement and better construction practices.
Impacts and Opportunities
The housing sector created over 252,800 jobs in 2024, significantly boosting household incomes and local economies.
Workers earned above the national minimum wage, demonstrating the sector’s potential for inclusive economic growth.
Sustainability emerged as a key focus, with increased demand for energy-efficient and green buildings.
While large-scale implementation of sustainable practices remains a hurdle, it represents an opportunity for developers to meet evolving market preferences and promote environmentally friendly lifestyles.
The government’s urban renewal efforts improved living conditions in informal settlements through infrastructure upgrades at 110 sites. These projects enhanced urban resilience while addressing social equity concerns.
Future Prospects
Looking ahead, the first National Urban Forum, planned for 2025, aims to align strategies with the New Urban Agenda.
Partnerships with the World Bank and UN-Habitat are expected to enhance land registration, urban development, and access to affordable housing.
To sustain progress, the government must address critical challenges, including rising construction costs, financing constraints, and infrastructural deficiencies.
Strengthening public-private partnerships, promoting sustainable building practices, and reforming housing finance policies will be crucial.
Conclusion
The Nigerian housing sector in 2024 showcased a mix of growth, challenges, and opportunities. In 2024, the housing sector faced a significant challenge with high interest rates, driven by the government’s NPR policy, which operated at no less than 27 percent. These elevated interest rates became a substantial barrier for prospective homebuyers, as previously highlighted.
Under the “Renewed Hope Agenda,” the government laid the groundwork for transformative change, though significant obstacles remain.
By prioritizing innovation, collaboration, and sustainability, the sector can fulfill its potential to drive economic development and improve the lives of millions of Nigerians.
The year highlighted the importance of long-term strategies and the collective effort required to achieve an inclusive and sustainable housing future.
The Nigerian housing sector in 2024 was a dynamic blend of progress and challenges. Despite the strides made under the ‘Renewed Hope Agenda,’ issues such as high construction costs, limited mortgage accessibility, and frequent building collapses underscored the need for continued reform.
The sector demonstrated its potential as a driver of economic growth and job creation while highlighting the importance of sustainability and inclusivity. Moving forward, addressing systemic inefficiencies, enhancing regulatory frameworks, and fostering stronger public-private partnerships will be key to achieving a resilient and equitable housing ecosystem for all Nigerians.
