Chairman of Exclusive Estates, Peter Adobamen, discusses the challenges facing Nigeria’s real estate sector and possible solutions in this interview with ANOZIE EGOLE
What are the major challenges preventing the private sector from addressing Nigeria’s housing deficit, which is estimated to be in the millions of units?
The major barriers include high construction costs, expensive land acquisition processes, limited access to long-term financing, inadequate infrastructure, regulatory bottlenecks, and low purchasing power among citizens. Developers often finance projects through short-term commercial loans with high interest rates, while homebuyers lack affordable mortgages. The result is a mismatch between housing supply and effective demand. Although demand for housing is enormous, the number of people who can afford newly built homes remains relatively low.
What impact have rising inflation rates had on construction expenses, property values, and housing affordability for ordinary Nigerians?
Inflation has significantly increased the cost of cement, steel, roofing materials, electrical fittings, labour, and transportation. Developers are forced to transfer these additional costs to buyers, leading to higher property prices and rents. For average Nigerians whose incomes have not grown at the same pace as inflation, housing affordability has worsened considerably. Consequently, many people have moved from homeownership aspirations to rental accommodation.
In what ways have recent naira volatility and currency shifts affected development costs and confidence among real estate investors?
The depreciation of the naira has increased the cost of imported construction materials, machinery, lifts, finishing materials, and technical services. Development budgets prepared a year ago often become obsolete within months. While local investors generally remain active because real estate serves as a hedge against inflation, foreign investors tend to be more cautious due to exchange rate uncertainty and difficulties in projecting future returns.
What effect have elevated interest rates had on mortgage accessibility and the appetite for residential properties?
High interest rates have made mortgage financing inaccessible for many Nigerians. Most commercial mortgage products remain too expensive for middle-income earners. As a result, mortgage penetration remains extremely low compared to global standards. Many buyers prefer instalment payment plans directly from developers, while others postpone homeownership entirely. This limits demand for formal housing and slows market growth.
Which government policies do you believe would be most effective in driving investment and expansion in Nigeria’s real estate sector?
Several policies could significantly transform the sector. The government should simplify and digitise land registration and title processes, reduce consent fees, registration charges, and transaction taxes, expand access to affordable mortgage financing, provide tax incentives for affordable housing developers, and encourage local production of building materials. It should also improve infrastructure in emerging development corridors, establish a more transparent and predictable regulatory environment, and strengthen public-private housing partnerships. These measures would reduce development costs and attract greater investment.
To what extent does inadequate infrastructure raise development costs and hinder real estate growth, and what solutions do you see as viable?
Infrastructure deficits significantly increase development costs. Developers often provide roads, drainage systems, electricity, water supply, and security independently. These costs are ultimately passed to buyers. The most viable solution is strategic public investment in infrastructure combined with public-private partnership models. When the government provides trunk infrastructure, developers can focus resources on housing delivery, resulting in lower housing costs.
Given the difficulties many Nigerians face in securing long-term housing loans, what measures can deepen the mortgage market and improve homeownership rates
Nigeria needs comprehensive mortgage sector reforms, including lower mortgage interest rates and longer repayment tenures of 20–30 years; expansion of the National Housing Fund and strengthening of mortgage institutions; improved foreclosure frameworks and mortgage guarantee schemes; and increased participation of pension funds and institutional investors. A robust mortgage ecosystem is essential if Nigeria hopes to significantly increase homeownership levels.
What role is real estate expected to play in boosting economic growth, job creation, and wealth generation over the next ten years?
Real estate has enormous multiplier effects. It stimulates demand across over 30 sectors, including cement, steel, transportation, legal services, architecture, engineering, banking, insurance, and facility management. Large-scale housing development can create millions of jobs, increase government revenue, improve urban development, and help families build long-term wealth through property ownership. Real estate can become one of Nigeria’s strongest non-oil economic drivers.
How does Nigeria’s real estate market stack up against peers in Africa for foreign investors, and what key factors guide their investment decisions?
Nigeria remains attractive because of its large population, rapid urbanisation, housing deficit, and growing middle class. However, compared to some African markets, investors often express concerns about regulatory uncertainty, foreign exchange volatility, infrastructure gaps, and land administration challenges. Foreign investors typically evaluate political stability, ease of doing business, currency stability, legal protection, and investment exit opportunities before committing capital.
What strategies is your company adopting to stay profitable despite increasing costs of land, labour, and construction materials?
At Exclusive Estates, we focus on strategic land acquisition in emerging growth corridors; strong project feasibility and market research; off-plan sales to improve project cash flow; strategic partnerships with investors and contractors; diversification into brokerage, consultancy, training, and property development; and technology-driven marketing and client acquisition. These strategies help us maintain profitability while delivering value to clients and investors.
What improvements are needed in public-private partnerships to scale up affordable housing delivery?
Government can contribute land, infrastructure, and regulatory support, while private developers provide capital, technical expertise, and project execution. Risk-sharing mechanisms, transparent procurement processes, and clearly defined contractual frameworks are essential. Successful PPPs can accelerate housing delivery, reduce costs, and improve access to affordable homes for low- and middle-income households.
Which economic indicators are most critical when assessing new real estate investment or development opportunities?
When evaluating a real estate investment or development opportunity, I pay close attention to a combination of macroeconomic and market-specific indicators. One of the first factors I consider is inflation because it directly affects construction costs, property values, and rental income. Interest rates are equally important, as they influence the cost of financing for both developers and buyers. Exchange rate stability is another critical consideration, particularly in Nigeria, where many building materials and construction inputs are either imported or affected by foreign exchange fluctuations. I also assess broader economic indicators such as gross domestic product growth, employment levels, and household income trends because they provide insight into the purchasing power of potential buyers and tenants. Beyond the macroeconomic environment, I examine demographic and location-specific factors. Population growth, urbanisation rates, and migration patterns often indicate future demand for housing and commercial space. Infrastructure developments such as new roads, rail systems, airports, and utility projects can significantly enhance property values and attract investment to a particular area. I also analyse rental yields, vacancy rates, and comparable property prices to determine whether a project is financially viable and capable of generating sustainable returns. Ultimately, successful real estate investment requires a careful balance between economic realities, market demand, and long-term growth potential. These indicators help determine both project viability and future market demand.
What effect do issues such as unclear land titles, bureaucratic delays, and multiple taxes have on the competitiveness of Nigeria’s property industry?
These issues increase transaction costs, delay project delivery, and discourage investment. Delays in obtaining Certificates of Occupancy, Governor’s Consent, building approvals, and other permits can add months or years to project timelines. Multiple taxes and levies further reduce profitability and increase housing prices. Streamlining these processes would significantly improve Nigeria’s competitiveness and attract more local and international capital.
Looking ahead, what are the key economic risks and opportunities likely to shape Nigeria’s property market over the next five years?
Over the next five years, Nigeria’s property market will be shaped by a mixture of significant risks and extraordinary opportunities. On the risk side, persistent inflation, exchange rate volatility, high borrowing costs, and rising construction expenses could continue to put pressure on both developers and homebuyers. These factors increase project costs, reduce affordability, and can slow the pace of real estate development. Regulatory uncertainties, delays in obtaining approvals, and infrastructure deficits also remain challenges that may discourage investment if not adequately addressed. Additionally, weakening consumer purchasing power could affect demand in certain segments of the property market, particularly among middle-income earners. Despite these challenges, the opportunities far outweigh the risks. Nigeria’s rapidly growing population, increasing urbanisation, and substantial housing deficit create a strong and sustained demand for residential accommodation. Emerging cities and development corridors are opening up new investment opportunities, while technological innovations in property marketing, management, and financing are making the sector more efficient and accessible. The growing interest in affordable housing, mixed-use developments, short-let accommodation, and institutional real estate investment also presents significant prospects for growth. If government and private-sector stakeholders work together to improve infrastructure, expand access to housing finance, and streamline regulatory processes, Nigeria’s real estate sector could become one of the country’s most powerful drivers of economic growth, job creation, and wealth generation. For investors with a long-term perspective, the future of the Nigerian property market remains highly promising.
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