The Impact of Economic Policies on Real Estate Growth in Nigeria

ESV Charles Niyi Famuyiwa

The real estate sector is one of Nigeria’s most promising engines for economic growth, job creation, and wealth generation. Yet, its performance has been anything but consistent often rising and falling in tandem with government policies and broader economic shifts. From monetary tightening to fiscal reforms, economic policies have a profound impact on the sector’s ability to attract investment, deliver affordable housing, and drive sustainable urban development.

One of the most visible ways economic policies shape real estate is through monetary regulation. Decisions by the Central Bank of Nigeria (CBN) on interest rates, inflation control, and credit availability directly influence property development and mortgage access. When interest rates rise, as seen in recent years, the cost of borrowing increases, discouraging both developers and potential homeowners. Higher lending costs mean more expensive projects, delayed construction, and reduced affordability. On the other hand, a more accommodative monetary policy—with lower interest rates and increased liquidity—can stimulate housing demand and boost private-sector investment in infrastructure and construction.

Fiscal policies also play a critical role. Government taxation, budget allocations, and incentives can either strengthen or stifle growth in the real estate market. High import duties on building materials, for instance, raise construction costs and make housing projects less viable. Conversely, tax reliefs and targeted incentives for affordable housing developers can encourage investment and bridge Nigeria’s estimated 20 million housing deficit. Unfortunately, inconsistent and sometimes contradictory policies—such as abrupt changes in import tariffs or land acquisition regulations create uncertainty that deters long-term investors.

Land and regulatory policies form another cornerstone of the real estate equation. Bureaucratic bottlenecks in land registration, opaque titling systems, and overlapping government agencies often delay projects and inflate costs. Despite the introduction of the Land Use Act to standardize ownership, implementation challenges and corruption in land administration continue to undermine confidence in the system. Economic policies that prioritize land reform, digital land registries, and transparent processes could unlock billions in untapped property value.

Macroeconomic policies also indirectly affect real estate. Currency devaluation and inflation, for example, push up the prices of imported materials, further straining developers and buyers. Additionally, policies surrounding infrastructure development such as road networks, electricity, and urban planning determine where real estate growth thrives. Areas with supportive infrastructure policies experience rapid appreciation in land value, while regions neglected by government investment remain stagnant.

To ensure sustainable growth, Nigeria’s economic policies must align with a long-term vision for the real estate industry. Policymakers should design frameworks that balance macroeconomic stability with sectoral incentives. Encouraging local production of building materials, offering tax breaks for affordable housing, and creating mortgage-backed securities can attract more investors and make housing accessible to the masses.

Ultimately, real estate does not grow in isolation it mirrors the economy’s health and policy direction. When economic policies are coherent, transparent, and supportive, the sector flourishes, driving employment and national prosperity. But when they are inconsistent or restrictive, real estate becomes another casualty of poor governance.

For Nigeria to achieve inclusive development, its economic policies must move beyond rhetoric to foster real growth brick by brick, home by home.

Famuyiwa is a registered estate surveyor and valuer