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.

The post Nigeria Housing Deficit Presents Trillion-Naira Investment Opportunity — PAC Research appeared first on Housing TV Africa.

Nigeria’s real estate sector has surged to a remarkable ₦41.3 trillion market value, positioning it as one of the country’s most promising long-term investment frontiers.

Investors with patient capital and strategic vision are now tapping into this rapidly expanding market, driven by population growth, housing shortages and rising urbanisation.

Latest industry data show that real estate contributed 5.45% to Nigeria’s GDP in 2024. In the third quarter alone, the sector saw a 46.52% nominal growth, a performance comparable to global property trends, although slightly below the United States’ 51.3% year-on-year growth.

According to Dotun Bamigbola, Senior Partner at Bamigbola Consulting, the market presents “massive opportunities even at the continental level,” noting that Nigeria’s population, estimated at 230 million, and a housing deficit of 20–28 million units, provide an enormous investment runway.

At the continental scale, he added, Africa’s real estate potential is projected at US$17.64 trillion by 2025, with residential property valued at US$14.87 trillion—driven largely by rising middle-class demands and infrastructure expansion.

REITs: Nigeria Still Emerging, But Showing Promise

Despite significant potential, Nigeria’s Real Estate Investment Trust (REIT) market remains relatively small at about $600 million, according to the Knight Frank Africa Horizons 2025/26 Report. This places Nigeria behind South Africa, whose REITs command about $8.5 billion, but ahead of several African countries still developing their frameworks.

Bamigbola noted that Nigeria’s REIT returns currently average 7%, which is lower than South Africa’s 15% and Kenya’s 9%, reflecting operational gaps and structural challenges.

Yet, a few REITs—Union Homes REIT, SFS REIT and UPDC REIT—continue to demonstrate resilience. Together, they generated ₦2.16 billion in rental income in 2023.

UPDC REIT, one of the most diversified in the market, maintains more than 100 properties, including shopping centres, office towers, student hostels and residential developments across Lagos and Abuja. Its flagship assets include:

• Victoria Mall Plaza, Lagos
• Kingsway Building, Marina
• UAC House, Abuja
• Pan-Atlantic University Hostel, Epe

Industry analysts believe the combination of a large housing deficit, growing urbanisation, and an emerging structured investment market positions real estate as one of Nigeria’s most lucrative long-term sectors.

The post Nigeria’s Real Estate Market Hits ₦41.3trn, Unlocking New Investment Opportunities appeared first on Housing TV Africa.