By Maduka Nweke
Two years into President Bola Tinubu’s tenure, stakeholders say that the real estate sector is losing steam as weakening purchasing power pushes homeownership out of reach for many.
They warned that soaring inflation, rising construction costs and dwindling consumer income are stalling development and threatening the sector’s long-term sustainability.
Again, players say that Nigeria’s real estate faces opacity challenges which is retarding its growth.
With an estimated $300–$900 billion trapped in what could be described as dead capital, unreliable data are discouraging both local and international investors.
This means that unlocking Nigeria’s full real estate potential hinges on building a transparent, data-driven market. This transparency, noticed overtime, became worse in recent years because of other policies that are interrelated.
In a bid to support Nigeria’s housing sector, two of the country’s largest cement producers—BUA Group and Dangote Group—have agreed to maintain fixed cement prices specifically for contractors working on federal government housing projects. While this initiative is a commendable step toward reducing construction costs, it underscores a broader challenge: the government’s limited ability to rein in market forces that continue to drive up the cost of building materials.
Without affordable inputs, the goal of providing affordable housing remains out of reach. Inflation, currency depreciation, and erratic policy shifts have severely weakened consumer purchasing power, particularly among low-income earners. These economic pressures are taking a toll on the real estate sector, with rising property prices, declining demand, and cautious investor behaviour creating a climate of uncertainty.
Developers are increasingly caught in a bind, unable to meet contractual pricing agreements as the cost of materials and exchange rates fluctuate unpredictably. For many, the volatility has turned what should be steady progress into a series of difficult adjustments, leaving the housing sector stuck in a cycle of promise and constraint.
Analysts have long argued that reforming Nigeria’s land registry system to ensure secure, transparent ownership could unlock vast amounts of dormant capital, stimulating investment, economic growth, and ultimately improving living standards. However, real estate stakeholders maintain that while the current administration inherited many structural challenges, the removal of the petrol subsidy significantly worsened the situation, triggering widespread hardship.
In response, several state governments introduced cushioning measures to mitigate the impact on citizens. Notably, Lagos State has moved toward capping monthly rents, a policy aimed at aligning rental payments with tenants’ monthly incomes, making housing more accessible in the face of rising costs.
Over the past two years, and especially within the last five months, a wave of controversial policy decisions has had far-reaching consequences. Many Nigerians attribute the current surge in living costs, business closures, and job losses to these policy shifts, which they say have undermined national productivity and driven millions deeper into poverty and hunger.
Experts’ views
According to Dr. Chiedu Nweke, Chairman Periwinkle Residences Limited and MD/CEO, Swampsea Construction Company Limited, the GDP has grown by 3.5 per cent which is significant.
“The naira has stabilised at about N1,600 to the dollar. If the power sector improves the economy will grow rapidly. This will increase productivity and reduce inflation and unemployment. The increase in purchasing power will impact positively on the real estate market,” he said.
The situation in real estate is just dire and the players in the sector are not finding it easy especially in development, material sourcing, marketing, financing or cost of funds and others.
Speaking with Daily Sun on the state of Nigeria’s real estate sector under President Tinubu’s administration, Mr. Meckson Innocent Okoro, Principal Partner at MI Okoro and Associates, highlighted several critical policy decisions that have had far-reaching consequences. According to him, the removal of the petrol subsidy, monetary policy adjustments, and overall economic instability have combined to strain both households and businesses.
“In the past two years, we’ve seen industries begin to fold up, and even corporate organisations, including banks, are downsizing just to survive,” he noted. “More workers are being pushed into the labour market, and this is a clear sign that the government has not fully settled down.”
Okoro stressed that these developments have taken a serious toll on the real estate sector, which is heavily dependent on consumer confidence and disposable income. “People can only invest in land or housing when their purchasing power is strong. But when many Nigerians are struggling to afford basic necessities like food, and when cash flow is so tight across the country, real estate becomes the least of their concerns,” he said.
“These things impact negatively on the real estate sector because 75 per cent of every building component is imported and the high cost of exchange rate weighs negatively on the development of the real estate. You can see that even people who sell on upland don’t sell any more because they no longer pay. They do not sell again on upland bases because of cost escalation. There is no point if you start a project today at eight naira and by the time you are delivering that property, it is now eight plus y plus a plus- (8+y+a+…) and so on due to cost escalation arising from the uncertainty of exchange rate. These are the challenges and the fact is that generally, there is poor purchasing power among the majority of the people. As a matter of fact, the only people I can say they buy are those people in government; these are the Politicians who buy at all cost because you and I know the source of their income. It really doesn’t matter to them how much the property is being sold. They can be bought at all costs but we shouldn’t use them as yardsticks,” he said.
For Mrs. Monica Efe Osaghae, Managing Director of Efe Enterprises Limited, the opportunity cost of Nigeria’s long-standing fuel subsidy regime is staggering. She believes the funds spent on subsidies could have significantly transformed critical sectors of the economy, comparing the amount to the combined budgets for healthcare, education, agriculture, and defense over the same period.
“This money was also enough to provide 23,000 solar-powered boreholes with storage tanks, 70,000 classroom blocks, 38,700 irrigation units, and 3,870 healthcare centres. It could have also funded 260 academic research programmes,” Osaghae said.
She emphasized that the removal of fuel subsidies presents a strategic opportunity for the government to reallocate financial resources toward essential infrastructure. However, she warned that without proper management, the ripple effects—such as rising construction costs, labour expenses, and transportation charges—could lead to the abandonment of many building projects in the near term.
“In the mid-term, the removal of fuel subsidies, coupled with escalating construction material costs, labour expenses, and transportation charges will likely contribute to the abandonment of construction projects,” she noted.
On the other hand, Mr. Godwin Alenkhe, National President of the Estate Rent and Commission Agents Association of Nigeria (ERCAAN), commended the Tinubu administration for its efforts in expanding affordable housing options.
“In the past two years, the government has made tremendous progress in the housing sector through the provision of affordable and cheaper homes for Nigerians,” he said.
Alenkhe highlighted the launch of the Renewed Hope Housing Scheme, a signature initiative under the current administration designed to deliver affordable one-, two-, and three-bedroom homes in 17 states across the federation. “This project is based on a public-private partnership involving real estate developers and state governments,” he noted.
However, he also pointed out major bottlenecks facing the housing sector—particularly the steep cost of local building materials.
“The only shortcoming of this administration is the incessant increase in building material prices, which has denied many Nigerians the ability to build their homes,” he said. “Local products like cement, roofing sheets, and iron rods are now priced beyond the reach of the average citizen.”
Alenkhe further criticized the lack of a coordinated national policy for the real estate sector, adding that unregulated practices and state-level land administration challenges are making it harder for Nigerians to own property—especially in major urban centres.
“Nigerians, especially in high-density cities like Lagos, Port Harcourt, Kano, and Abuja, are being left at the mercy of obnoxious state government policies on land administration and acquisition,” he concluded.