Nigeria’s real estate sector is entering 2026 with cautious optimism, as innovative financing mechanisms, tax reforms, and infrastructure investments begin reshaping the market, Okwy Iroegbu-Chikezie reports.

The country continues to grapple with a housing deficit estimated at 28 million units by the World Bank. Experts insist that closing this gap will require long-term, affordable mortgage financing and a concerted effort from both public and private sectors.

Sustained demand across residential housing, digital infrastructure, neighbourhood retail outlets, and office spaces is expected to underpin moderate growth in the sector, with the Ministry of Finance Incorporated Real Estate Fund (MREIF) emerging as a key catalyst.

The MREIF, structured as a N1 trillion public-purpose, private sector–led initiative, aims to provide funding to developers and low-cost mortgages to homebuyers, addressing both supply- and demand-side challenges. According to Biyi Adekunbi, Head of ARM Investment Managers, the fund offers mortgages at interest rates as low as 12% with repayment tenors of up to 20 years, backed by both federal government participation and private capital.

“The idea is to provide long-term, low-interest financing that works for both developers and homebuyers,” Adekunbi said, noting that the fund is accessible to salaried workers, self-employed Nigerians, and diaspora investors seeking home ownership.

ARM Investment Managers has so far raised N250 billion for on-lending through primary mortgage banks, including N100 billion from the federal government. Several mortgage banks, such as Homebase Mortgage Bank, have already accessed tranches of this fund to expand affordable housing nationwide.

Industry experts believe that initiatives like MREIF, alongside government-backed projects such as the Renewed Hope Housing Scheme and the Lagos–Calabar Coastal Highway, could significantly lift the sector’s performance in 2026. However, the full impact depends on reduced infrastructure burdens for developers and the harmonisation of taxes across states and local governments.

Growth is expected to remain concentrated in urban centres like Lagos, Abuja, and Port Harcourt, driven by rapid urbanisation, population growth, and diaspora investment.

Access to land, infrastructure, and financing remains critical to housing affordability. Dr. Meckson Okoro, CEO of M.I. Okoro and Associates, urged government provision of basic infrastructure such as roads, power, water, and mass transit to lower development costs. He also recommended integrating solar power solutions into housing estates to reduce energy costs.

Diaspora investors remain eager but cautious, citing concerns over fraud and weak enforcement. Fred Adegeye, a Nigerian investor in the UK, highlighted losses suffered by many Nigerians abroad due to fraudulent developers and land disputes, emphasizing the need for strict enforcement of laws to restore confidence.

Tax reforms are expected to play a transformative role. According to Victor Alonge, President of the Nigerian Institution of Estate Surveyors and Valuers, the new tax regime positively impacts real estate investment and home ownership. Small-scale businesses in construction are now exempt from certain taxes, while larger firms benefit from VAT incentives and support for local production, strengthening mortgage financing and improving housing access.

Mr. Adegbenga Alamu, COO of QShelter Ltd., added that reforms also reduce borrowing costs for homebuyers, as mortgage interest is now deductible before tax computation, making financing cheaper and more accessible.

With these combined efforts—affordable financing, tax incentives, infrastructure development, and strengthened governance—Nigeria’s real estate sector is poised for recovery and sustainable growth in 2026.