As of 2023 Nigeria had a housing deficit of 28 million units, with an estimated population of 200 million. With over 52.5% of the population living in urban areas. Nigeria had a 7 million unit housing shortfall in 1991. That number increased to 12 million in 2007, 14 million in 2010, 20 million units in 2018, and a 28 million housing deficit in 2023. 
As of 2023 Nigeria had a housing deficit of 28 million units, with an estimated population of 200 million. With over 52.5% of the population living in urban areas. Nigeria had a 7 million unit housing shortfall in 1991. That number increased to 12 million in 2007, 14 million in 2010, 20 million units in 2018, and a 28 million housing deficit in 2023.
The slow administrative processes, the high cost of land registration and land titles, housing policies, the high cost of building materials, the high cost of land acquisition, and a host of other factors are some of the major factors affecting the supply of housing units in Nigeria.
Recent years have seen an increase in housing costs in Nigeria’s metropolitan centres, especially Lagos, Abuja, and Port Harcourt, on a magnitude that is uncommon in emerging cities.
The primary supply limitation is land size; there are few safe locations near offices and central business districts (CBD). However, demand is seen to be rising as the wealthy become wealthier and as foreign aid and investment attract more foreign workers for aid and building. The relaxation of pressure to provide affordable housing in high-demand locations has caused prices to soar.
Access to Mortgage: The first is financial availability, particularly with regard to mortgages for those who must take out loans in order to buy their own homes.
Ease of Doing Business: As of 2020, Nigeria’s ease of doing business ranked 131st worldwide. The convenience of the legal processes related to real estate and land acquisition comes in second. According to a 2012 study of Nigerians, 22% of individuals who wish to invest in real estate cited trouble getting titles as their second biggest obstacle. 18% of respondents then mention the expense and duration of foreclosing on a mortgaged home. This ignorance of the Low-income individuals may find investing in real estate to be highly risky due to their lack of knowledge of the regulations and procedures pertaining to real estate as well as their obligation to incur debt.
Cost of Construction: Having access to affordable, high-quality building materials is the third challenge. The high expense of building a house in Nigeria is passed on to the customer in the real estate and rental industries. In Nigeria, building a house is expected to cost $50,000; in South Africa, it is anticipated to cost $36,000; and in India, it is only $26,000. Inadequate infrastructure raises the cost of manufacturing and shipping items, and a workforce shortage forces pre-construction training, which is an extra expense that the construction company often bears.
The fact that Priye Diete-Spiff, the first military administrator of Rivers State, had a fantastic plan to decongest the state by planning for the cities of Degema, Ahoada, and Bori among others. Governor Sim Fubara started the 20,000 housing units at Mbodo Aluu in Rivers State in the local government district of Ikwere.
Investment in products that satisfy market demand, such as 1 and 2 bedrooms in prime locations in bustling cities like Lagos, Port Harcourt, and Abuja, will continue to generate strong profits whether they are leased or sold. Tenants’ and buyers’ location decisions will be influenced by the growing demand for gated communities and more secure estates due to increased security awareness. This might increase the value of residential homes in the Estates by as much as 5% to 8%. It will become increasingly significant in the growth of residential real estate.
The Nigerian Real Estate market is anticipated to increase at a compound annual growth rate (CAGR) of 7.52% between 2024 and 2028, reaching a market volume of US$3.02 trillion by that year.
Source: Statista Market Insights
The future of real estate in Nigeria is influenced by various factors including urbanization trends, population growth, economic development, government policies, and infrastructure investments. Nigeria’s real estate sector has shown resilience and potential for growth despite challenges such as inadequate infrastructure, land tenure issues, and regulatory uncertainties.
2. Infrastructure Development: Infrastructure development is critical to the success of the real estate industry. Investments in transport, road networks, power generation, and water infrastructure increase accessibility and make locations more appealing for real estate development. Government initiatives and private-sector investments in infrastructure projects can boost real estate development across the country.
3. Economic Growth and Stability: The performance of the real estate business in Nigeria is influenced by its economic growth and stability. Positive economic indicators, such as GDP growth, steady inflation rates, and foreign direct investment, can increase investor confidence in the real estate sector. Economic issues or political instability, on the other hand, may decrease investor enthusiasm and have an impact on real estate activity.
4. Government Policies and Regulations: Government rules and regulations have a huge impact on the real estate market. Land tenure, property rights, taxation, and urban planning policies all have an impact on the ease with which real estate transactions can be completed. Clear and consistent regulations that promote investment, property rights protection, and transparency have the potential to attract more investors and drive sector growth.
5. Technology and Innovation: Technological advancements are transforming the real estate business around the world, including Nigeria. Virtual reality, digital marketing platforms, and property management software are transforming how properties are marketed, managed, and sold. Embracing technology and innovation can improve efficiency, transparency, and customer experience in Nigeria’s real estate sector.
Finally, urbanisation, infrastructural developments, economic stability, favourable government policies, and technological advancements all point to a bright future for Nigerian real estate. Addressing obstacles such as infrastructure shortfalls, regulatory uncertainties, and availability to funding will be critical for Nigeria’s real estate sector to reach its full potential.