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  Quality housing in Nigeria is mostly out of the reach of the regular citizen. This problem is pronounced in major urban centres. A majority of people in those locations are either forced to live in substandard spaces, or worse, find their abode in slums. For many, this issue has worsened in the past few years.
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This article examines the main reasons for the high cost of purchasing or renting a decent residence in Nigeria. It also proffers solutions to these causes.

Reasons Why Quality Housing in Nigeria is Expensive

Here are some of the reasons why good living spaces are expensive in Nigeria:

High Cost of Construction Materials

A large portion of Nigeria’s building materials are imported. Think iron rods, tiles, roofing sheets, etc. As a result, they are subject to exchange rate fluctuations. Because the value of the naira has continued to decline against major world currencies, these materials have become more expensive over time. Meanwhile, local production of building materials remains limited. Solution: Greater investment in the development of local industrial capacity for the production of building materials. Reduced dependence on imports could lower building costs.

Limited Availability of Land

Land is a finite resource, and is not exactly abundant in places like Lagos, Abuja, or Port Harcourt. In cities such as these, the demand for land routinely outstrips supply. The scarcity of land in prime locations tends to drive up prices. What’s more, land acquisition in many parts of Nigeria is complicated by bureaucratic delays in processing titles and permits. Solution: Government should streamline the process of land acquisition to address land tenure issues, and promote better urban planning. They should also simplify land title processes and support the development of satellite towns on the edges of major cities.
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Inadequate Infrastructure

The lack of sufficient infrastructure, such as roads, electricity, water supply, and drainage systems, increases the cost of building and maintaining homes. Developers often have to provide these things themselves for the estates they build. Then they pass on the added costs to the buyers and renters of the housing units within them. Solution: The government should prioritize the development of essential infrastructure, including roads, electricity, water supply, and drainage systems, in rural and urban areas.

Inflation and Economic Instability

Rampant inflation has plagued Nigeria for years, as has a general sense of economic instability. Inflation drives up the cost of raw materials, labour, and other inputs in the housing construction process. This makes it difficult for developers to build inexpensive quality housing, for buyers to purchase it at relatively low prices, and for would-be tenants to rent within their budget. Solution: Public Private Partnerships (PPPs) can enable the delivery of affordable housing. The government must also tackle the systemic problems that drive inflation in Nigeria.

High Interest Rates and Limited Financing Options

The interest rates on home loans are too high for the regular Nigerian. Developers also have to pay double-digit interest rates on loans they secure from banks. Then they pass on this cost to final buyers and renters. This is one more reason for the high property prices and rental costs that exist in Nigeria. Solution: The government should offer incentives, such as tax breaks, subsidies, or access to low-interest loans, that will motivate developers to prioritize affordable housing over luxury developments.
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Final Words

This article has addressed the major reasons why quality housing in Nigeria is expensive. And, as you may have observed, many of the solutions to this problem are the responsibility of the government. However, developers can also play a role, by seeking alternative sources of finance for their projects and acquiring their building materials from the local producers that do exist.
Got a suggestion? Contact us: editor@connectnigeria.com
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This article was first published on 20th March 2025
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ikenna-nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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