Property developers, aspiring homebuyers, and renters have suddenly found themselves in a dilemma as economic realities and uncertainties in Nigeria stretch wallets, stall plans, and consequently, reset dreams to almost zero.
The economic realities in Nigeria, contrary to the illusion of well-being presented to the populace by economists, are that macroeconomic indices are out of control, with inflation driving up commodity prices and eroding purchasing power to levels never seen before.
Nigerians and their economy are, therefore, witnessing an era of skyrocketing development costs, even as purchasing power is shrinking. It is also an era when interest rates have soared; the naira has depreciated; input costs have tripled, and borrowing is expensive, sometimes, unviable.
Olajumoke Akinwunmi, Co-founder of Alitheia and chairman of Purple Group, who made these submissions, added that, for many Nigerians, the housing affordability threshold has been shattered.
Akinwunmi was the guest speaker at a breakfast session organised in Lagos recently by Ubosi Eleh & Co, a firm of estate surveyors and valuers, with the theme, ‘Stretched Wallets, Stalled Plans: The Real Estate Dilemma.’
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She noted that Nigeria is now a country where renters spend as much as 70 per cent of their income on shelter, a stark contrast to the 30 percent benchmark recommended by the UN.
“That figure alone should jolt us. Those trying to build or buy today are facing not just barriers, they’re facing cliffs,” she said, stressing, “developers, investors, tenants, and professionals are all being tested, and what’s emerging is not merely a sector under pressure, but a system under reconstruction.”
The reality of the moment, she noted, is that an aspiring homeowner who spent years saving towards a modest equity contribution suddenly finds that same contribution is now a fraction of what’s required.
“Buyers’ dream resets to zero. At the same time, developers are struggling to determine realistic end-product pricing in a market where cost inputs change weekly. Uncertainty now defines both ends of the spectrum, supply and demand,” she lamented.
The realities of the moment is not just about the individual, but also about institutions, according to Akinwunmi, citing rent default cases involving corporate clients in prime commercial spaces. “These cases are not due to unwillingness, but because financial models from two years ago have been rendered obsolete.
The operational cost of maintaining office buildings, estates, and retail spaces has surged. Facility managers are caught between rising expectations and shrinking budgets,” she said.
Akinwunmi noted that there is also the impact of the systemic issues on debt financing, adding that while high interest rates may benefit lenders in theory, in practice, they’re stifling credit.
“When fear grips the financial system, lending becomes tighter, risk thresholds rise, and terms become punitive. This isn’t just bad for developers, it constricts the entire pipeline of real estate activity.
These financial pressures have exposed deep structural weaknesses in the way our sector is designed, funded, regulated, and implemented. Our market is fragmented, overly informal, and lacking in transparency,” she noted.
Continuing, she pointed out that “planning systems are inefficient, regulatory pathways are choked with bureaucracy, and there’s no coherent data framework to guide sound decision-making. In many ways, our real estate system wasn’t built to withstand shocks of this magnitude, and it’s showing.
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The pricing mechanisms we use don’t reflect real market conditions. Risk-sharing between developers and financiers is practically non-existent. And the financing model itself is rigid and narrow, built around off-plan sales and short-term bank loans, which are simply not sustainable in this climate.”
As a way out of the choking and unsustainable system, Akinwunmi recommended redesigning the financing architecture, saying that innovation is no longer optional as the sector needs blended finance, combining concessional funds, commercial capital, and institutional support to mitigate risk and unlock new sources of liquidity.
“We need to rethink how we raise capital: from crowdsourced investments to diaspora bonds to public-private partnerships rooted in shared value. Every viable option should be explored.
Second, we must embrace a granular understanding of market realities. That means real-time data, sector-wide transparency, and pricing strategies that reflect the evolving financial landscape. We can no longer afford to build products no one can afford,” she said.
Akinwunmi believes that, in spite of everything, Nigeria’s real estate market still holds enormous potential, explaining that there are untapped opportunities across logistics, student housing, middle-income rentals, and climate-resilient design.
She argued that, “if we can unlock them, we can not only survive this season but rebuild a more resilient, inclusive, and dynamic sector.”
