Soaring Property Prices Shut Millions Out of Homeownership

· ** Developers pass rising construction costs to buyers, tenants**

· Estate surveyor demands mass social housing, council-led schemes, stronger regulation

Bennett Oghifo

Soaring property prices, escalating rents and rising construction costs are deepening Nigeria’s housing affordability crisis, shutting millions of households out of homeownership as incomes struggle to keep pace with the cost of shelter.

The crisis, according to real estate developers, estate surveyors and investment professionals, is driven by a combination of expensive land, construction materials, labour, infrastructure, financing, statutory charges, inadequate housing supply and weak purchasing power.

The President of the Real Estate Developers Association of Nigeria (REDAN), Oba Akintoye Adeoye, said the continuous increase in residential property prices and rents had become a major concern for developers, prospective homeowners, tenants and investors.

Adeoye said housing costs were rising faster than the purchasing power of many Nigerians, stressing that the problem could not be solved by focusing only on the final price charged by developers.

According to him, the entire housing value chain must be examined, including land acquisition, construction, infrastructure, finance, transportation, professional services, statutory charges and regulatory costs.

He explained that developers were operating in an increasingly expensive construction environment, with sharp increases in the cost of building materials, land, labour, transportation, infrastructure and finance.

“When the cost of producing a house increases, it inevitably impacts the price of the finished property,” REDAN said, noting that developers could not indefinitely absorb rising production costs without threatening the sustainability of their projects.

The association, however, cautioned that rising development costs should not be used to justify arbitrary property pricing or exploitation of consumers.

Rather, it argued that the central policy question should be how to make it cheaper to produce housing.

“If government and other stakeholders can reduce the cost of land, infrastructure, building materials and housing finance, developers will be in a stronger position to deliver more housing units at more affordable prices,” it said.

Adeoye said even a property priced according to actual development costs could remain unaffordable to a worker whose income had not increased proportionately.

He therefore called for greater access to long-term and affordable mortgage finance, saying Nigerians should be able to spread the cost of homeownership over 15, 20 or 30 years rather than being required to raise the entire purchase price upfront.

REDAN said it had been advocating mortgage financing, rent-to-own arrangements, cooperative housing schemes, housing savings programmes and other innovative mechanisms to improve access to homeownership.

The federal government’s latest housing data illustrates the scale of the challenge, although estimates have varied depending on the methodology used.

A National Housing Data Technical Committee report released in January 2026 put Nigeria’s 2025 housing deficit at 14.925 million units, while government agencies and previous estimates had placed the gap considerably higher.

Beyond the numerical deficit, another dimension of the crisis is the quality and affordability of existing housing. Government data released in December 2025 indicated that about 15.2 million housing units were structurally inadequate, highlighting the need not only to construct new homes but also to improve existing housing stock and basic services.

Chief M.I. Okoro, a Fellow of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), said the combination of soaring property values, high rents, expensive land and inadequate government intervention was increasingly putting homeownership beyond the reach of ordinary Nigerians.

Speaking against the backdrop of rising residential and commercial property prices, Okoro identified the widening gap between housing demand and supply as a fundamental driver of the crisis.

“It never used to be like this, but it will continue to go up,” he said, attributing the pressure to population growth, migration into urban centres and increasing demand for accommodation.

According to him, while population continues to rise, the supply of land remains essentially fixed, creating intense competition for available development sites.

He pointed to prime Lagos locations such as Ikoyi, Victoria Island and Lekki Phase One, where developers are increasingly building vertically because of the scarcity and high cost of land.

“The higher you go, the more expensive it is to develop it, and more expensive to acquire it,” he said.

But the consequences, according to Okoro, are extending beyond the affluent districts.

He described the phenomenon as a “displacement factor”, explaining that rising property values and rents in prime areas were pushing residents towards traditionally less expensive communities on the Mainland and outskirts of Lagos.

Areas such as Mushin, Shomolu, Ajegunle, Ajah, Epe, Igando, Agbara, he said, were increasingly absorbing people displaced by higher housing costs elsewhere.

“High rent or high cost of purchase is a function of pressure on demand when supply is not responding at that rate,” he said.

Okoro argued that the solution must therefore include a deliberate increase in housing supply, particularly through social housing and local government intervention.

He questioned why Nigeria’s 774 local governments had not developed council housing schemes similar to those used in some other countries to provide affordable accommodation.

“Have we ever heard that one council developed so and so flats and they are selling at a cheap rate to bring down the cost of rent?” he asked.

He called on state governments to support local councils in providing decent amenities and mass housing within their communities.

“Social housing is not meant to be for profit motive. That is where government comes in,” he said.

Okoro similarly argued that government-backed housing programmes would have limited impact if prospective homeowners lacked the income required to service long-term loans.

He cited the possibility of a worker accessing a government-supported housing facility but questioned whether the worker’s income would be sufficient to sustain repayments over two decades.

“The government can give you the rest, make you go to the bank and access a loan of N100 million. You pay. But you must be able to have a regular income that will support that for 20 years,” he said.

The mortgage market has, however, recorded new interventions. The Ministry of Finance Incorporated Real Estate Investment Fund (MREIF) said in June 2026 that it had delivered N128 billion in mortgages to 1,859 families across 25 states at a fixed interest rate of 9.75 per cent, with loan tenures of up to 20 years and a minimum 10 per cent equity contribution.

By August 2026, the State House said the fund had increased its disbursements to N140 billion, creating 2,018 mortgages across 27 states.

The interventions indicate an effort to address the financing barrier, but experts argue that affordable mortgages alone cannot resolve the crisis if the underlying cost of producing houses remains high.

Chief Investment Officer, Panterra, a housing development company, Ayo Ibaru, said the housing affordability crisis had a coherent chain of causes: construction-cost inflation increases development costs; weak household purchasing power widens the affordability gap; market opacity increases transaction risks; while inadequate financing and infrastructure constrain supply.

According to him, prices of cement, steel, finishing materials, labour, diesel and other inputs have increased substantially, while exchange-rate volatility has added pressure to imported materials, equipment and expertise.

Developers, he said, are therefore periodically forced to reassess project budgets and viability.

“Where market conditions permit, some of these additional costs are ultimately transferred through higher sale prices, higher rents and service charges,” Ibaru said.

However, he noted that the extent to which developers could pass on rising costs was limited by household purchasing power and effective market demand.

This, he said, had created a difficult equation in which construction costs were increasing faster than the ability of many prospective buyers to pay.

“The affordability challenge, therefore, is not only a consequence of expensive materials. It reflects a broader cost structure involving land, titling, infrastructure, finance and construction,” he said.

Ibaru said housing products must be affordable not only to build but also to finance and maintain.

Speaking further, Okoro also identified land administration and documentation as major contributors to housing costs.

According to him, developers often face difficulties obtaining and perfecting land titles, including Certificates of Occupancy and other registration documents, with associated costs eventually reflected in the prices paid by buyers and tenants.

He called for reforms that would make land acquisition and documentation more transparent, efficient and affordable to genuine developers.

Ibaru also argued that property-market opacity creates what he described as a “cost of uncertainty”, with title verification difficulties, informal transactions, inadequate disclosure and poorly regulated operators increasing financial and legal risks.

He called for stronger developer accreditation, clearer disclosure requirements for off-plan developments, appropriate escrow arrangements, faster land registration and stronger mechanisms for addressing poorly constructed or abandoned projects.

“The objective should not simply be more regulation,” he said, but a market in which participants can establish who owns an asset, what is being sold, what it should cost, what risks are attached and what recourse exists if an agreement fails.

REDAN said stronger regulation was necessary to protect consumers and restore confidence in the property market.

The association, which describes itself as a self-regulatory organisation, said its membership remained voluntary and that it had consistently advocated legislation and regulations capable of strengthening professionalism, transparency and accountability in the sector.

It called for stronger monitoring of property transactions, verification of developers and property titles, enforcement of development standards and sanctions against fraudulent operators.

It also urged prospective homebuyers to conduct due diligence before making substantial payments.

Okoro also linked Nigeria’s housing crisis to the concentration of economic opportunities and infrastructure in major urban centres, particularly Lagos.

He argued that improved electricity, water, roads, telecommunications and other amenities in smaller cities and rural communities would reduce the pressure driving migration into Lagos and other major urban centres.

“Government should be deliberate in developing the rural areas in order to mitigate forceful migration of people to urban areas,” he said.

For the real estate professional, housing policy must therefore go beyond building houses to addressing the geographical distribution of jobs, infrastructure and economic opportunities.

His real estate information advocacy initiative, which runs on Arise TV, TVC and NTA Network, is aimed at educating Nigerians on property, housing and development issues.

“I think I will continue to profess real estate and development as long as I’m alive,” he said.

The emerging consensus among the industry stakeholders is that Nigeria’s housing affordability crisis cannot be attributed to developers or landlords alone.

Rather, it reflects a chain of interconnected pressures: expensive land, high construction costs, inadequate infrastructure, costly finance, weak household incomes, limited housing supply, inefficient land administration and gaps in regulation and consumer protection.

Until the gap between property prices and household purchasing power is narrowed, and the cost of producing housing is brought down, the aspiration of owning a decent home is likely to remain beyond the reach of a substantial proportion of Nigerians.