Nigeria’s housing sector is reeling under the combined weight of FX volatility and inflation stifling growth, with developers warning that the industry is facing one of its toughest times in recent history.
Real estate players say costs of housing development have surged by nearly 90 per cent, driven largely by the naira’s depreciation, rising inflation, and heavy dependence on imported building materials.
This concern was highlighted at the official unveiling of Dream Place Apartments in Lekki, Lagos State, where operators painted a stark picture of how macroeconomic turbulence is reshaping Nigeria’s housing market.
FX volatility and inflation stifle housing sector growth
Gracemman Nigeria Limited’s Managing Director, Oluyemi Ejidiran, explained that inflationary pressure and persistent forex swings have sharply inflated material costs.
Cement, steel, tiles, and finishing items have surged between 50 and 70 per cent, while some have risen as much as 90 per cent.
“Over 70 per cent of inputs used in housing development are either imported or indirectly tied to foreign exchange.
With the sharp devaluation of the naira, even local materials have become significantly more expensive.
This, combined with financing constraints, has pushed developers into survival mode,” Ejidiran said.
To adapt, developers now stockpile materials when possible to hedge against further price hikes, rely more heavily on off-plan sales to raise equity, and mix local with imported resources to manage exposure to forex shocks without compromising quality.
Rising costs erode affordability
Industry experts note that the impact of FX volatility and inflation stifling housing sector growth is not limited to developers alone.
For potential homeowners, affordability has worsened dramatically.
Michael Egbekoya, Chief Executive Officer of McYouniverse Group, observed that house prices have risen 50 to 70 per cent since 2022, while incomes have remained largely stagnant.
“The mortgage-to-income ratio has climbed from about 30 per cent to over 45 per cent, effectively pricing many middle-income earners out of the property market,” he said.
This affordability crisis, he added, is squeezing household budgets and limiting access to mortgages, making homeownership a distant dream for many Nigerians.
Innovations in sustainable housing
Despite the bleak outlook, some developers are pushing for sustainable innovation.
Ejidiran highlighted the rising adoption of eco-friendly features such as flat roofs designed for solar integration, rainwater harvesting systems to reduce utility bills, and smart home technologies for security and energy efficiency.
Compact but livable designs are also becoming more common, enabling developers to manage costs while delivering functional housing.
He stressed, however, that long-term growth would depend on policy consistency, infrastructure development, and financing frameworks that encourage investment.
Collaboration as a solution
Speaking on the housing deficit, the Managing Director of Prindex Properties, Tolu Bawa-Allah, called for stronger partnerships among developers to scale up housing supply.
With Nigeria’s deficit estimated at over 20 million units, he warned that the scale of the challenge requires collective action rather than fragmented efforts.
“Even if 500 developers deliver 100 housing units annually for 10 years, we would only achieve 500,000 units, which is still a fraction of the 20 million deficit.
We must start seeing ourselves as collaborators rather than competitors,” Bawa-Allah said.
According to him, joint ventures between developers and closer cooperation with government on land acquisition and infrastructure would create a more enabling environment for large-scale housing delivery.
Track record and ambitious targets
Prindex Properties has, since its establishment in 2012, developed, sold, and managed nearly 100 apartments, providing housing for close to 200 residents across 77 units.
The firm has completed 10 projects, including the newly launched Dream Place, and currently serves 128 investors and subscribers.
Chairman of the company’s board, Tola Atekoja, reaffirmed its long-term ambition of delivering 5,000 units by 2030.
He urged stakeholders to work together to unlock Nigeria’s housing potential, stressing that collaboration remains the only viable path to closing the massive housing gap.
Outlook for the housing market
Analysts believe the current environment shows how FX volatility and inflation stifle housing sector growth while creating broader implications for the economy.
Rising costs are discouraging investment, slowing mortgage uptake, and constraining the construction industry, which is a major driver of jobs and economic activity.
Without urgent policy reforms, operators fear the situation may worsen, further delaying Nigeria’s dream of bridging its housing deficit.
Still, industry leaders say there is hope if government, developers, and financiers align to provide incentives, affordable credit, and infrastructure support.
For now, however, the reality is clear: the housing sector is under severe pressure, and reversing the tide will require coordinated action to stabilise the economy, tame inflation, and create sustainable pathways for affordable housing delivery.
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