Industry professionals have called for the adoption of innovative financial models and the integration of data analytics to reshape Nigeria’s real estate sector and address persistent challenges affecting housing supply and affordability.
They stressed that outdated financing and construction methods are ill-suited to Nigeria’s current economic headwinds, including inflation, currency instability, and escalating build costs.
At a breakfast session hosted in Lagos by Ubosi Eleh and Company, themed: ‘Stretched Wallets, Stalled Plans: The Real Estate Dilemma’, Co-founder of Alitheia Capital, Olajumoke Akinwunmi, outlined how outdated development and financing models are failing to keep pace with today’s market realities. She said that volatility in currency, inflation, and interest rates has rendered traditional housing solutions both impractical and inaccessible.
“We’ve witnessed an era of skyrocketing development costs, even as purchasing power shrinks. Interest rates have soared. The naira has depreciated. Input costs have tripled,” Akinwunmi said. “Borrowing is expensive and, frankly, sometimes unviable. For many Nigerians, the housing affordability threshold has been shattered.”
Citing a United Nations benchmark, she noted that many Nigerians now spend as much as 70 per cent of their income on shelter, far above the globally recommended 30 per cent ceiling, “a figure that should jolt us,” she warned.
Akinwunmi, who is also Chair of Purple Group, painted a stark picture of the housing landscape; aspiring homeowners, despite years of savings, find their equity contributions now severely devalued, while developers are unable to price their products in a market where material costs change weekly.
“Those trying to build or buy today are facing not just barriers, they’re facing cliffs,” she said. “Uncertainty now defines both ends of the spectrum: supply and demand.”
According to her, developers, investors, tenants, and professionals are being tested like never before, and what is emerging is not just a sector under pressure, but a system undergoing reconstruction.
“We must begin by acknowledging that many of the forces shaping our reality are beyond our control. But within our grasp is the capacity to respond creatively, collectively, and deliberately. What we must do is re-evaluate our frameworks,” Akinwunmi said.
She observed that financial models that were viable two years ago have now become obsolete due to macroeconomic shocks.
“The operational cost of maintaining office buildings, estates, and retail spaces has surged. Facility managers are caught between rising expectations and shrinking budgets,” she noted.
Akinwunmi further stressed the effect on debt financing, pointing out that while high interest rates may benefit lenders in theory, in practice, they are stifling credit expansion. “When fear grips the financial system, lending becomes tighter, risk thresholds rise, and terms become punitive. This isn’t just bad for developers; it constricts the entire pipeline of real estate activity.”
She said these pressures have exposed deep structural weaknesses in the industry, particularly in how it is designed, financed, regulated, and executed.
“Our market is fragmented, overly informal, and lacking in transparency. Planning systems are inefficient, regulatory pathways are choked with bureaucracy, and there’s no coherent data framework to guide sound decision-making.”
“The pricing mechanisms we use don’t reflect real market conditions. Risk-sharing between developers and financiers is practically non-existent. And the financing model itself is rigid and narrow, built around off-plan sales and short-term bank loans, which are simply not sustainable in this climate.”
To address these challenges, Akinwunmi called for a redesign of the sector’s financial architecture. “We need blended finance, combining concessional funds, commercial capital, and institutional support to mitigate risk and unlock new sources of liquidity. We need to rethink how we raise capital: from crowdsourced investments to diaspora bonds to public-private partnerships rooted in shared value.”
She urged stakeholders to embrace a granular understanding of market realities, adopt real-time data, drive transparency across the sector, and employ pricing strategies that align with the evolving financial landscape. Despite the odds, she said, the Nigerian real estate market still holds enormous potential, especially in underexplored segments like logistics hubs, student housing, middle-income rentals, and climate-resilient designs.
For the Principal Partner of Ubosi Eleh and Company, Mr Emeka Eleh, infrastructure continues to be the most significant driver of real estate value in urban centres.
He emphasised that the most desirable rental locations are those with reliable infrastructure and connectivity. Eleh called for the decentralisation of infrastructure development to support more affordable housing options in outer cities and suburbs such as Epe and Badagry in Lagos.
“Infrastructure is the foundation of urban development. If we provide effective transportation and utility services to peripheral areas, people can live farther from city centres and still enjoy quality living standards at a lower cost,” he said.
