Firm Says Housing Reforms Need Construction Finance to Expand Housing Supply

A real estate development firm has called for Nigeria’s proposed housing reforms to be supported by a credible construction finance framework, warning that stronger regulation and improved access to mortgages alone will not resolve the country’s housing deficit.

Speaking on CNBC Africa’s Closing Bell West Africa, the firm’s Group Chief Commercial Officer, Adetola Akinsulire, said the proposed National Housing and Built Environment Regulation Policy and National Mortgage Industry Policy address two major challenges in the housing sector: the lack of trust and limited access to financing for homebuyers.

However, he said construction finance remained a critical gap that policymakers needed to address.

According to Akinsulire, the reforms must deliver three key outcomes: increased confidence in the housing market, better access to finance for prospective homeowners and more funding for developers to construct homes.

The Federal Ministry of Housing and Urban Development recently disclosed that real estate and construction contributed more than ₦77 trillion to Nigeria’s economy in 2025, despite the absence of a unified regulatory framework for the sector.

The proposed reforms are intended to strengthen oversight, improve buyer protection and create a more transparent environment for property transactions and development.

Proposed Housing Reforms Target Regulation and Buyer Protection

The planned National Housing and Built Environment Regulation Policy includes measures covering developer registration, escrow protection, land value management, construction quality and urban renewal.

It also proposes a National Housing Data Observatory to improve the availability of information and market intelligence, alongside plans for a Housing Finance Authority and a structured investment window for Nigerians living abroad.

Akinsulire said these measures could help address longstanding weaknesses in the property market, particularly concerns about transparency and the protection of homebuyers.

Nevertheless, he cautioned that improvements in regulation and access to buyer financing would not automatically result in more homes being built.

He explained that developers also require access to appropriate funding to acquire land, finance construction and complete projects before recovering their investments through property sales.

Without this third component, he warned, the reform agenda could struggle to achieve its broader housing delivery objectives.

Better Housing Data Alone Will Not Increase Supply

Akinsulire welcomed the proposed National Housing Data Observatory, noting that better information could improve transparency and help market participants make more informed decisions.

Reliable housing data could also support policy development, investment planning and a clearer understanding of supply and demand across the sector.

However, he stressed that information must be accompanied by the financial resources needed to translate plans into completed homes.

He argued that while data could help identify housing needs and investment opportunities, it could not replace the funding required to construct residential developments.

For this reason, he said the government’s reform programme should consider how developers would access construction capital alongside measures designed to improve buyer protection and mortgage availability.

Repayment Periods Matter in Housing Affordability

The real estate executive also urged policymakers to broaden discussions about housing affordability beyond the purchase price of a property.

He said the length of time buyers are given to repay a home loan can significantly influence whether a property is affordable to them.

Using a ₦60 million property as an example, Akinsulire explained that the home could remain financially out of reach if the buyer were required to complete payment within two years. Extending the repayment period to 30 years, however, could make the same property more accessible, depending on the buyer’s income and financing terms.

His argument highlights the importance of long-term mortgage products that allow repayment obligations to be spread over a period that better reflects household earning capacity.

Nigeria’s mortgage-to-gross domestic product ratio remains between 0.02 and 0.07 per cent, according to the figures cited in the report. This compares with approximately 30 per cent in South Africa and 70 per cent in the United Kingdom.

The figures illustrate the significant difference in mortgage market depth between Nigeria and the two countries, as well as the challenges facing the expansion of housing finance in the country.

Firm Develops Starter Homes for the Mass Market

Akinsulire disclosed that Mixta Africa was working on starter homes designed to meet the needs of the mass market.

He said innovation led by developers could contribute to improving affordability and expanding access to housing for a wider range of buyers.

Starter homes can provide an entry point for households that cannot afford larger or more expensive properties, provided that prices and financing arrangements align with their financial capacity.

The company’s initiative reflects the wider need for housing developers to consider the purchasing power of prospective buyers when designing residential projects.

Akinsulire also identified the proposed diaspora investment window as a potential early opportunity within the government’s reform agenda.

He pointed to existing demand among Nigerians living abroad and their familiarity with structured mortgage and property-financing products as factors that could support the initiative.

A well-structured investment channel could help connect diaspora capital with housing projects, although its effectiveness would depend on the terms, safeguards and investment opportunities available.

Construction Finance Must Complement Buyer Protection

Mixta Africa reiterated its position that escrow funds should only be released when construction milestones have been independently verified.

Escrow arrangements are intended to protect buyers by controlling how funds are held and released during property development. However, the company argued that these protections must be supported by a sustainable financing framework for construction.

Under a system where buyers’ payments are subject to stricter controls, developers may need alternative sources of capital to fund work at different stages of a project.

This is particularly important because payments made by buyers purchasing properties off-plan have historically helped developers finance construction before the homes are completed.

If access to these funds becomes more restricted, developers will need appropriately structured and competitively priced financing to continue delivering projects.

Independent verification of construction milestones would also help establish a clearer connection between actual project progress and the release of funds.

The company believes that combining effective buyer safeguards with reliable construction finance would help protect consumers without unnecessarily constraining housing supply.

Collaboration Needed to Deliver Housing Reforms

The call for a construction finance framework highlights the need for closer cooperation among government, financial institutions, property developers and built-environment professionals.

While regulation can improve accountability and mortgage reforms can help prospective buyers obtain financing, developers must also be able to secure the capital needed to deliver residential projects.

The success of the proposed reforms will therefore depend on whether they can strengthen confidence in the housing market, make homeownership financing more accessible and support the construction of additional homes.

For Nigeria, addressing these three areas together could help create a more transparent housing market while improving the capacity of credible developers to deliver homes at scale.