Lagos State’s growing housing crisis is being driven not only by inflation and rising construction costs but also by a complex web of permits, levies and regulatory charges that developers say are making housing increasingly expensive and inaccessible.

As Nigeria’s commercial capital continues to attract thousands of new residents annually, demand for accommodation has far outpaced supply. Estimates place Lagos’ housing deficit at about 3.4 million units, while rising inflation has significantly increased the cost of cement, iron rods, labour and other building materials.

However, industry stakeholders argue that beyond market forces, regulatory costs have become a major contributor to the affordability challenge.

Data from Lagos State’s budget performance reveals that agencies responsible for planning approvals and building regulation generate revenues that rival or exceed government spending on housing. In 2024, planning and building-related agencies were assigned revenue targets of about N151 billion, compared to the N55.92 billion budgeted for housing development.

Reports further indicate that Lagos generated approximately N80 billion from building approval fees between January and May 2025 alone, highlighting the scale of revenue derived from the approval process.

Developers say securing approval for construction projects involves navigating multiple agencies, paying various fees and complying with numerous regulatory requirements before a single block is laid.

Lagos-based developer, Olaoluwa Awolaja, described the process as lengthy and costly, noting that obtaining planning approval is only the beginning.

“Once you submit your drawings, that is where the real journey starts. You must secure approvals, structural certifications, inspections and stage certifications before construction can progress smoothly,” he said.

According to him, developers are often required to obtain environmental clearances, fire service approvals, survey verifications and title documentation, depending on the size and nature of the project.

Another developer, Bukola Ojo, recounted how a simple renovation project became delayed for months after officials demanded additional documentation and levy payments during construction.

She said the interruption increased project costs and created uncertainty, forcing contractors to leave the site while awaiting further approvals.

Industry stakeholders estimate that regulatory compliance alone can account for between 15 and 25 per cent of total project costs before construction expenses are considered.

The burden is ultimately transferred to buyers and tenants.

Across Lagos, residents continue to grapple with rising rents as landlords and developers adjust prices to reflect increasing development costs.

A tenant in Idimu, Blessing Adebayo, said her one-bedroom apartment rent increased from N450,000 to N1.5 million within two years, reflecting the growing pressure on housing affordability.

Experts say approval delays further worsen the situation by extending project timelines and increasing financing costs.

Sources familiar with the approval process disclosed that administrative restructuring and digitisation efforts have created a backlog, with some applications reportedly awaiting final approval for up to three months.

Real estate professionals argue that the combination of multiple levies, duplicated regulatory functions and prolonged approval timelines is discouraging investment in housing delivery.

The General Secretary of the Association of Real Estate Developers of Lagos State (AREDOLS), Ahmad Sanni, noted that developers face numerous charges, including planning fees, stage certification fees, emergency management levies, waste management charges and other statutory payments.

Similarly, President of the Real Estate Developers Association of Nigeria (REDAN), Akintoye Adeoye, criticised what he described as excessive approval requirements and high regulatory costs.

Legal experts have also raised concerns over overlapping charges imposed by different agencies, warning that some fees appear to cover similar regulatory functions under different names.

Stakeholders are now calling for comprehensive reforms, including a one-stop approval platform, consolidation of overlapping levies, transparent fee structures and full digitisation of permit processing.

They argue that simplifying the approval system would reduce delays, lower development costs and encourage greater investment in affordable housing.

With Lagos continuing to experience rapid urbanisation, experts warn that addressing regulatory bottlenecks may be essential to improving housing supply, stabilising rents and making home ownership more attainable for millions of residents.

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The Real Estate Developers Association of Nigeria, REDAN, has held its 2026 Annual General Meeting in Abuja, bringing together key industry players, regulators, financial institutions, and professional bodies to review its performance and set a strategic agenda for the year ahead.

The meeting took place at the Los Angeles Events and Conference Centre in Kado, Federal Capital Territory, with executives, board members, stakeholders, and partners in attendance.

Speaking at the event, the Keynote Speaker, President and Chairman of Council of the Chartered Institute of Taxation of Nigeria (CITN) Mr. Innocent Chinyere, acknowledged members of the association, members of the Board of Trustees, and supporters of REDAN, describing the Annual General Meeting as a critical platform for reflection, accountability, and renewed commitment to the growth of Nigeria’s real estate sector.
The Chairman of the Board of Trustees, Town Planner David Gabuwa, alongside Town Planner Gabriel Jibril, who represented the National President of the Nigerian Institute of Town Planners, Obonachime Efenadikwu, emphasized the importance of collaboration between real estate developers and planning professionals.
In his goodwill message, the Nigerian Institute of Town Planners described REDAN as a critical stakeholder in the pursuit of orderly, inclusive, and sustainable human settlements in Nigeria.

He noted that the real estate sector plays a strategic role in national development, particularly in land use planning, housing delivery, urban regeneration, infrastructure provision, and environmental management.

He stressed that as Nigeria continues to experience rapid urbanization, the decisions of real estate developers increasingly shape the functionality, sustainability, and long-term value of cities.

According to him, compliance with approved layouts, respect for development standards, and early engagement with planning authorities remain essential conditions for successful real estate investment. He added that strong partnerships between planners and developers reduce conflict, improve project delivery, and enhance long-term asset value.

Spectators and Guest of Honour at the meeting commended REDAN’s leadership and members for their resilience and consistency in the real estate sector, despite economic and operational challenges.

They described the AGM as a reminder that the future of housing development in Nigeria must be driven by collaboration.

He noted that the theme of the meeting reaffirmed housing as a pillar of social stability and economic growth, stressing that decisions around financing, regulation, taxation, and affordability will ultimately determine the quality of development delivered across the country.

They further described it as more than a statutory reform, but a strategic policy signal aimed at promoting transparency and long-term investment across the real estate value chain.

Members actively engaged the leadership through questions, contributions, and debates, leading to the adoption of several resolutions aimed at strengthening efficiency, transparency, and organizational effectiveness.

The Meeting concluded with a reaffirming commitment amd sense of direction and optimism, as REDAN enters a new operational phase focused on sustainable urban development, affordable housing delivery, and stronger collaboration across Nigeria’s real estate value chain.

The post REDAN Holds 2026 AGM, Charts New Path for Sustainable Real Estate Development appeared first on Housing TV Africa.

At Karsana Estate in Abuja, one of the Federal Government’s flagship mortgage-backed housing schemes, the empty rows of completed houses tell a familiar story. Despite efforts to revitalise Nigeria’s mortgage market, most property developers still avoid mortgage-linked housing projects. Instead, they prefer cash-based or off-plan transactions that promise quicker returns and fewer complications.

This persistent reluctance has deepened the mismatch between supply and demand—leaving an oversupply of luxury homes for cash buyers and a chronic shortage of affordable housing for Nigerians who depend on long-term financing.

In developed economies, mortgage financing underpins homeownership. Developers construct homes, banks provide mortgage loans to buyers, and the developers are promptly paid. But in Nigeria, this cycle breaks down.

Private developers rarely engage with mortgage institutions. Most rely on short-term commercial loans with interest rates of 20–30 per cent—making it nearly impossible to tie up capital in mortgages that span 10 to 25 years.

According to the Real Estate Developers Association of Nigeria (REDAN), the country’s mortgage-to-GDP ratio is less than one per cent, one of the lowest in Africa. By contrast, South Africa’s mortgage sector contributes about 20 per cent to its GDP.

A senior REDAN member who requested anonymity explained the challenge succinctly: “Developers can’t afford to wait a decade for repayment. Inflation and high interest rates make that business model unsustainable.”

For potential homeowners, mortgage terms are just as daunting. Lending rates range from 18 to 25 per cent annually—far beyond what most middle-income earners can afford. Even the National Housing Fund’s six per cent loan scheme has limited reach and suffers from lengthy approval processes.

The shorter tenures common in Nigeria—typically 15 to 25 years—further inflate monthly repayments, while developers complain that banks often delay disbursements or alter terms midway through a project. This lack of reliability has eroded trust on both sides, creating a cycle where developers avoid mortgage-backed buyers, and banks, in turn, hesitate to fund developers.

The Nigerian Mortgage Refinance Company (NMRC), established in 2014 to inject liquidity into the market, has yet to achieve the desired impact. Limited capital, few mortgage originations, and the dominance of informal financing have restricted its reach.

Without a functional secondary mortgage market, lenders struggle to refinance existing loans or attract new investors. As a result, developers rely on private equity and self-financing—models that naturally favour high-end developments and cash-ready clients, including diaspora investors.

Beyond financing issues, land administration remains a major obstacle. Securing valid titles and approvals is slow, expensive, and bureaucratic. Since many urban lands are held under customary tenure without proper registration, they cannot easily be used for mortgage-backed projects.

This pushes developers to operate within informal frameworks—selling directly to buyers who can pay upfront or through short-term instalments rather than long-term mortgage plans.

Nigeria’s real estate sector, valued at over ₦41 trillion in 2024, now ranks as the third-largest contributor to GDP after trade and crop production. Yet, mortgage penetration remains abysmally low.

Data from the Federal Mortgage Bank of Nigeria (FMBN) show that between January and July 2025, ₦60.46 billion in mortgage loans were approved—barely making a dent in the estimated 22 million-unit housing deficit.

Only about 32 primary mortgage banks operate nationwide, and most cater to niche or high-income clients rather than the mass market.

Most Nigerians lack the steady income or credit profile needed to qualify for mortgage financing. With a large proportion of the workforce engaged in informal employment, documentation such as payslips and tax records is often unavailable.

Rising construction costs further compound the problem, pushing housing prices beyond the reach of average earners.

Olajide Dosunmu, Chief Executive Officer of Noble Ground, described the situation as “a long-standing structural challenge.” He, however, welcomed the Ministry of Finance Incorporated Real Estate Investment Fund (MREIF)—a public-private initiative offering mortgages at 9.75 per cent for up to 20 years—as “a genuine step in the right direction.”

“Processing now takes about two months,” he said. “You only need to pay 10 per cent upfront and show that your income is at least three times your repayment amount. The challenge, however, is that many people still can’t afford even that.”

Dosunmu urged the government to promote cost-effective construction materials such as mud and hydrofoam blocks to bring down overall housing costs.

Realty Point Limited’s Managing Director, Gbadebo Adejana, argued that mortgage-linked housing must be integrated from the earliest design stage. “If a project isn’t structured around mortgage financing from the beginning, it’s difficult to make it work later,” he said.

Former chairman of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Dotun Bamigbola, shared a similar view. “Most developers prefer cash transactions because they offer faster returns,” he noted. “Off-plan sales have become the substitute for mortgages, allowing buyers to pay over a shorter period during construction.”

Experts agree that deepening mortgage financing is critical to expanding homeownership in Nigeria. That will require coherent policy reforms across federal and state levels, recapitalising mortgage banks, improving credit scoring systems, and streamlining land titling processes.

Until these structural challenges are addressed, developers will continue to favour cash-based models—leaving millions of Nigerians locked out of affordable, mortgage-backed homeownership.

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