New reports by PAC Research have called for the adoption of incremental housing models, stronger housing finance systems and expanded public-private partnerships (PPPs) to address Nigeria’s widening housing deficit.
The publications, titled From Shortage to Opportunity: Unlocking the Billion-Dollar Housing Market and Lagos Housing Report: A Treasure Trove of Possibilities, argue that Nigeria’s housing challenges also present major investment opportunities valued in trillions of naira.
Housing Shortage Creates Investment Potential
According to the reports, Nigeria requires about 800,000 new homes annually to meet rising population growth and urban housing demand. This figure is projected to increase significantly, potentially tripling by 2030.
Despite the deficit, the research highlights a growing market opportunity for both local and international investors, driven by rapid urbanisation and increasing demand for affordable housing.
Low Mortgage Penetration Highlights Financing Gap
The reports also point to Nigeria’s low mortgage penetration, which currently stands at less than 1 percent of GDP.
This is significantly lower than countries such as the United States, where mortgage penetration is about 77 percent, and South Africa at 31 percent.
According to the publications, this gap underscores the need for deeper housing finance reforms to unlock sector growth.
FMBN Projects Rising Housing Demand
In the foreword to the reports, Managing Director of the Federal Mortgage Bank of Nigeria (FMBN), Shehu Osidi, warned that annual housing demand could rise to 2 million units by the end of the decade.
He described Nigeria’s housing sector as being at a critical turning point where urbanisation and population growth are creating both challenges and opportunities.
New Financing Models Recommended
The reports recommend several financing innovations to bridge the housing gap, including:
- Real Estate Investment Trusts (REITs)
- Diaspora mortgage schemes
- Federal Government housing initiatives
- Public-private partnerships (PPPs)
- Incremental housing development models
These mechanisms, according to PAC Research, are essential to expanding access to affordable housing and unlocking sector liquidity.
Lagos Remains Key Housing Market
The publications estimate that Lagos currently has about 1.49 million housing units, while demand stands at approximately 4.69 million units.
This creates an accessible market gap of roughly 2.81 million units, making Lagos one of Africa’s most active real estate markets.
The reports also note a shift in housing preferences, with more than 52 percent of residents favouring one- and two-bedroom apartments due to affordability and changing lifestyle patterns.
Strong Rental Returns in Prime Locations
PAC Research also highlighted strong rental yields in high-demand areas such as Lekki and Victoria Island.
According to the findings, three-bedroom apartments in Victoria Island can generate annual rents of up to N8 million, reflecting strong investor interest in prime Lagos real estate.
Experts Call for Immediate Action
Describing the report as a call to action, FMBN Managing Director Shehu Osidi said the time to invest in Nigeria’s housing sector is now.
He stressed that the benefits extend beyond financial returns to include inclusive economic growth and improved urban resilience.
Similarly, the Oniru of Iruland, Abdulwasiu Lawal, described the Lagos housing report as an important guide for real estate stakeholders and investors.
He noted that emerging growth corridors such as Ajah, Epe and Lekki are expected to drive the next phase of Lagos real estate expansion.
