Nigeria’s mortgage penetration below 1% of GDP – Report

Nigeria’s mortgage penetration is said to be below 1% of Gross Domestic Product (GDP), compared to 77 percent in the United States and 31 percent in South Africa, a new report has shown. The PAC Research highlighted the low penetration in its comprehensive assessments of Nigeria’s housing ecosystem in its two landmark publications: “From Shortage […]

Nigeria’s mortgage penetration is said to be below 1% of Gross Domestic Product (GDP), compared to 77 percent in the United States and 31 percent in South Africa, a new report has shown.
The PAC Research highlighted the low penetration in its comprehensive assessments of Nigeria’s housing ecosystem in its two landmark publications: “From Shortage to Opportunity: Unlocking the Billion-Dollar Housing Market” and “Lagos Housing Report: A Treasure Trove of Possibilities.”
The reports revealed a national housing deficit of more than 28 million units, with Lagos State alone accounting for a shortfall of 3.4 million units.
Despite the scale of the challenge, the reports position the deficit as a major investment opportunity, estimating the market’s potential value in trillions of naira.
The national report, which features a foreword by the Managing Director of the Federal Mortgage Bank of Nigeria (FMBN), Shehu Usman Osidi, notes that Nigeria needs approximately 800,000 new homes annually to keep pace with population growth.
That figure is projected to rise to 2 million homes per year by the end of the decade.
“Nigeria stands at a critical juncture where rapid urbanization and economic transformation converge to create unprecedented opportunities,” the report stated.
The publication outlines innovative financing solutions aimed at bridging the housing gap, including Real Estate Investment Trusts (REITs), diaspora mortgage products, and the Renewed Hope Housing Scheme.
A major section of the report focuses on Lagos, Nigeria’s commercial hub, which attracts more than 475,000 new residents annually.
According to the report, Lagos currently has an estimated housing stock of 1.49 million units, while demand stands at approximately 4.69 million units, leaving an accessible market gap of about 2.81 million units.
Among the report’s key findings is a growing preference for smaller housing units, with more than 52 percent of residents favoring one- and two-bedroom apartments, reflecting strong demand for affordable and compact living spaces.
The report also highlights strong rental yields in prime locations such as Lekki and Victoria Island, where three-bedroom apartments in Victoria Island can command annual rents of up to N18 million.
To address the housing challenge, the report recommends the adoption of incremental housing models, deeper housing finance penetration, and stronger Public-Private Partnerships (PPPs), among other measures.

 

Reviewing the reports, Shehu Usman Osidi described them as a timely call to action.

 

“This report is more than an analysis — it is a call to action. The time to invest in Nigeria’s housing market is now. The rewards extend beyond financial returns to include inclusive growth and urban resilience,” he said.

 

Also commenting on the publication, HRM Oba Abdulwasiu Omogbolahan Lawal (CON), the Oniru of Iruland and former Lagos State Commissioner for Housing, described the Lagos report as an essential guide for stakeholders in the real estate sector.

 

“As a former Commissioner of Housing, I attest that the Lagos Housing Report is a worthy guide. It upholds strong research standards and highlights emerging corridors such as Lekki, Ajah, and Epe as the next frontiers for real estate investment,” he said.