The Housing Development Advocacy Network (HDAN) has called for innovative funding models in Nigeria’s real estate sector to weather the current economic storm. This comes as the industry grapples with skyrocketing costs, slowing sales, and a deepening housing deficit. Executive Director of HDAN, Festus Adebayo, in a statement on Thursday, emphasised the urgent need for a change.
“Developers must innovate and create new methods of funding and building new houses if they must remain in business,” Adebayo stated, highlighting the dire situation facing the industry. The real estate market has been hit hard by a perfect storm of economic challenges. Inflation has driven construction costs to new heights, while the devaluation of the Naira has made importing building materials prohibitively expensive.
High interest rates, implemented by the Central Bank of Nigeria (CBN) to combat inflation, have made traditional financing options unattainable for many developers and potential homebuyers alike. The impact is evident in property prices across the country. In Abuja’s prime locations, such as Maitama, prices for luxury properties have more than doubled.
A 5-bedroom fully detached duplex that previously sold for ₦800 million now commands between ₦1.5 billion and ₦2 billion. Adebayo pointed out that the steep rise in property prices was partly due to inflation and the high cost of building materials, exacerbated by the devaluation of the Naira and the rising costs associate.