FG Moves to Establish Housing Regulatory Commission, Introduce Licensing for Developers and Estate Agents

The Federal Government has unveiled plans to establish a National Housing Industry Regulatory Commission that would license property developers and estate agents, strengthen consumer protection and introduce stricter measures against real estate fraud and building collapse in Nigeria.

The proposed commission forms part of sweeping reforms aimed at restoring public confidence in Nigeria’s housing sector, improving accountability and protecting homebuyers from fraudulent property transactions.

The Minister of Housing and Urban Development, Muttaqha Darma, disclosed the plans during a stakeholders’ validation workshop on the proposed National Housing and Built Environment Regulation Policy and National Mortgage Industry Policy in Abuja.

According to the minister, Nigeria’s housing industry has become a major contributor to the national economy but continues to operate without a comprehensive regulatory framework capable of adequately protecting investors, homeowners and tenants.

FG Proposes Compulsory Licensing for Real Estate Developers

Under the proposed housing regulation policy, property developers and estate agents would be required to obtain appropriate licences and operate within clearly defined professional standards.

The proposed National Housing Industry Regulatory Commission would oversee developer licensing, professional registration, construction standards, consumer protection and aspects of land administration.

The government intends to establish a regulatory structure comparable in oversight responsibilities to those operating in Nigeria’s telecommunications and electricity industries.

The proposed reforms are expected to address longstanding concerns about unqualified individuals entering the real estate business, fraudulent property sales and inadequate accountability for failed housing projects.

If approved and implemented, the new framework could introduce clearer requirements for individuals and companies seeking to develop, market or sell residential properties.

Developers May Be Required to Operate Escrow Accounts

A major component of the proposed reforms is the introduction of compulsory escrow arrangements for property developers.

Under this system, money paid by prospective homebuyers would be held in designated accounts rather than being placed entirely under the direct control of developers.

The objective is to reduce the risk of buyers losing their savings when housing projects are abandoned or developers fail to meet their obligations.

Escrow arrangements could also introduce greater transparency into off-plan property transactions, where buyers often make substantial payments before construction is completed.

The minister cited Dubai’s property regulatory system as an example of how structured supervision and escrow requirements can improve confidence in real estate investment.

However, the detailed rules governing the proposed escrow system, including the conditions for releasing funds, would need to be established during implementation.

Housing and Construction Contributed Over ₦77 Trillion to Economy

Darma said the housing and construction industries contributed more than ₦77 trillion to Nigeria’s economy in 2025.

According to figures presented by the minister, real estate services accounted for approximately 13.4 per cent of Gross Domestic Product, equivalent to about ₦41 trillion.

He explained that the combined contribution of real estate and construction exceeded ₦77 trillion, underscoring the economic importance of the sector.

Despite this contribution, he expressed concern that the industry remained vulnerable to fraudulent practices and weak consumer protection.

The proposed regulatory reforms are therefore intended to strengthen confidence in a sector that plays a significant role in employment, investment and national economic development.

Government Raises Alarm Over Building Collapse

The minister also expressed concern over recurring building collapse incidents across Nigeria.

He stated that the country had recorded more than 650 building collapse incidents and over 1,600 deaths since 1974.

The figures, cited by the minister during the workshop, highlight the need for stronger construction supervision, professional accountability and compliance with approved building standards.

Under the proposed framework, the government intends to strengthen oversight of construction activities and improve enforcement of relevant regulations.

The reforms could also encourage greater scrutiny of the roles played by developers, contractors, building professionals and approving authorities in construction projects.

FG Proposes National Housing Finance Authority

Beyond regulating property development, the Federal Government is also considering major reforms to Nigeria’s mortgage financing system.

The proposed National Mortgage Industry Policy includes plans to establish a National Housing Finance Authority and reform the Federal Mortgage Bank of Nigeria.

These measures are intended to expand access to housing loans and improve the effectiveness of existing mortgage finance institutions.

According to the minister, approximately six million Nigerians contribute to the National Housing Fund, which receives between ₦120 billion and ₦150 billion annually.

He nevertheless expressed concern that fewer than 500 mortgages are recorded, according to the figures presented at the workshop.

The government believes that improving mortgage administration and strengthening housing finance institutions could make homeownership more accessible.

Traders, Artisans May Join National Housing Fund

The proposed mortgage reforms also seek to expand National Housing Fund participation beyond formal-sector employees.

Under the plan, traders, artisans, commercial drivers and other informal-sector workers could participate through contributions starting from ₦5,000 monthly.

The proposal is intended to broaden financial inclusion and create opportunities for Nigerians who are traditionally excluded from formal mortgage financing.

The government is also considering a structured investment arrangement for Nigerians living abroad to channel additional capital into the housing sector.

These initiatives remain proposals and would require appropriate implementation arrangements before becoming operational.

FG Puts Nigeria’s Core Housing Deficit at 15 Million Units

The minister also disclosed that a technical committee had adopted internationally recognised housing assessment indicators to improve the measurement of Nigeria’s housing shortage.

These include the World Bank Adequate Housing Index and the UN-Habitat Household Crowding Index, according to the minister.

Using the assessment approach, the committee estimated Nigeria’s core housing deficit at approximately 15 million units.

Darma identified the North-West and North-East as regions facing particularly severe housing pressures.

The proposed reforms are expected to provide a stronger policy foundation for improving housing delivery and addressing affordability challenges.

Proposed Housing Policies Head to Federal Executive Council

The stakeholders’ validation workshop represents a key stage in the government’s consultation process before the proposed policies are presented to the Federal Executive Council.

Participants were invited to examine the proposals and recommend improvements before further consideration.

If approved, the reforms could significantly change how property development, real estate marketing, consumer protection and mortgage financing are regulated in Nigeria.

However, establishing a regulatory commission and introducing compulsory licensing would require appropriate legal authority, clear institutional responsibilities and effective enforcement arrangements.

The proposals also raise important questions about coordination between federal and state authorities, existing professional regulatory bodies and agencies responsible for land administration and building control.

For homebuyers, developers and housing investors, the proposed reforms represent a potential shift towards a more structured and accountable housing market.