Real estate experts have identified key measures that could stimulate further growth in the sector and improve its performance beyond the third quarter (Q3) of 2025 figures recently released by the National Bureau of Statistics (NBS).
The data showed strong nominal growth of about 89 percent, but a more modest real growth of 3.5 percent, with the sector contributing 13.36 percent to overall GDP. This reflects rising investment and property values, even as the broader economy continues its recovery.
The performance was better than the prior quarter, but slightly lower than Q3 2024, with key drivers being rising property values, increased investment, and a buoyant rental market, particularly for short-lets.
To improve on this performance, experts say a few things need to be done, including working on both the demand and supply sides of the real estate products.
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“For demand side you would have to look at financing because that’s really where the challenges are,” Ayo Ibaru, CEO, Northcourt Real Estate, stated recently.
Ibaru, who spoke in an interview in Lagos, explained that people can’t afford the high interest rates charged by lenders, particularly banks, commending the Ministry of Finance Incorporated (MOFI)’s Real Estate Investment Fund (MREIF) for having its rate as low as 9.75 percent.
He also commended the Fund for creating a more transparent product which, in a sense, attracts long-term large-scale investments. “But the problem is how many people, even at 9.75 percent, can afford assets that are as low as 22 million or as high as 300 million,” he lamented.
On the supply side, Ibaru said it gets a bit tricky because a lot of what goes into housing is imported, stressing that there are issues of importation and currency movement. He noted, however, that the currency issue is improving and the Central Bank of Nigeria (CBN) is doing a good job of attempting to keep it either stable or appreciating.
“It’s a demand and a supply thing, but going back to MREIF, what I like in what they’ve done is that they’ve taken the first step, and we’ve had one or two engagements. They’ve built a framework and have shown that transparency can be achieved in the real estate market. This is a very important thing, considering the long-term aspirations right off the market,” he noted.
The next step, according to him, would be to see how to bring down the 9.75 percent rate, even though it was dropped down from 12 percent.
Another major reform needed to unlock growth, experts say, is a review of the Land Use Act, alongside updated national surveys and deeper engagement with developers across the country. Fidelis Ufoma, an estate consultant, pointed to persistent bureaucratic inefficiencies in land and survey ministries.
“I mean you come to these ministries with all your papers. You come there with all your payments and then the process still takes quite a bit of time,” Ufoma said, adding, the World Bank still believes that it takes 92 days in Nigeria to register a property.
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“In Rwanda it takes eight days. Now, when we’re updating the chart, we put 92 days plus X, that X being that we don’t know what states you’re in. We don’t have anything and some states work better than others, but that also complicates the supply process,” Ufoma noted.
Meanwhile, a mortgage expert, who asked not to be named, said mortgage financing is critical to real estate growth in Nigeria. According to him, mortgages boost demand by enabling homeownership for those unable to pay cash, while also unlocking property value as collateral for further investment.
He noted, however, that mortgage penetration remains below one percent in Nigeria. If expanded, he said, it could stimulate construction through steady demand, raise property values and help households to build equity, though high interest rates remain a major constraint.
Looking ahead, Ufoma expects construction activity to pick up toward the second quarter (Q2) of 2026 as political activity intensifies ahead of the 2027 general elections.
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