Nigeria’s housing sector faces a monumental challenge as experts reveal the country requires over N5 trillion and 2.7 million new housing units annually for the next decade to address its staggering 21 million-unit deficit. This crisis comes amid rapid population growth, with the nation’s 220 million residents increasing at 2.5 percent yearly.
Real estate specialists at the recent Africa International Housing Show in Abuja highlighted that Nigeria’s housing market presents investment opportunities worth N5.5 trillion. However, the path to closing this enormous gap requires building approximately 550,000 housing units each year for the next ten years.
Nuel Osilama, Vice President of the Real Estate Developers’ Association of Nigeria (REDAN) North Central, emphasizes the urgency of the situation. If we are looking at 10 years, which is feasible, each state government must create enabling environment and be ready to work,” he states. His vision for 2035 suggests that if each state produces 56,000 housing units annually, the deficit could be eliminated within a decade.
The housing crisis is further complicated by a paradoxical situation where hundreds of thousands of completed housing units remain unoccupied across various residential estates nationwide. This vacancy phenomenon, particularly prevalent in luxury developments, stems from affordability issues and investment strategies where wealthy individuals purchase properties as long-term investments rather than for immediate occupancy.
Festus Adebayo, Executive Director of The Housing Development Advocacy Network, points out a critical misalignment in the market. “Developers are building houses that are not within the reach of those that really need them. We keep building houses for people that already have many houses,” he observes. This disconnect particularly affects urban areas, where the housing shortage is most acute.
The situation is exacerbated by numerous abandoned housing projects across the country. Developers attribute this to economic instability, particularly the volatile exchange rate affecting imported building materials. Since the current administration took office, the Naira has depreciated significantly, moving from N400 to N1,600 against the dollar, making project completion increasingly challenging.
In response to these challenges, the government has initiated several measures. Ahmed Dangiwa, Minister of Housing and Urban Development, recently announced plans to deliver 50,000 housing units, though he acknowledges this falls short of the required 550,000 annual units. The ministry has launched an Online Housing Portal, which has already received over 28,000 applications, demonstrating the high demand for affordable housing.
Security concerns have emerged as another significant obstacle, particularly in states like Imo. Developers report that kidnapping threats have discouraged potential buyers and halted construction activities in some areas. “We need security at the grassroots level and better rural roads to enable people to move into rural areas to build more housing units,” explains a developer who requested anonymity due to security concerns.
Pastor Matthew Ashimolowo, addressing the Africa International Housing Show, referenced World Bank projections indicating Nigeria needs to construct approximately 700,000 housing units annually for the next 20 years, requiring an investment of N59 trillion. He emphasizes that real estate development is fundamentally a “financing game,” requiring capital throughout the value chain.
The government’s response includes plans to establish a National Social Housing Fund to ensure access to decent accommodation for all Nigerians, including vulnerable groups. This aligns with the United Nations’ Sustainable Development Goal 11, which aims to provide high-quality, affordable homes for all by 2030.
As Nigeria grapples with this housing crisis, the urgency for comprehensive solutions involving both public and private sectors becomes increasingly apparent. The success of these initiatives will depend on addressing multiple challenges, from financing and affordability to security and infrastructure development, all while racing against rapid urbanization that the UN projects will see 60 percent of Nigerians living in cities by 2030.
