New drivers for real estate recovery

The real estate sector is entering 2026 with cautious optimism, as new financial instruments, tax reforms and infrastructure investments begin to reshape the market, OKWY IROEGBU- CHIKEZIE  reports.

With a soaring housing deficit has remained a source of concern to both government and stakeholders in the country. The nation’s housing shortfall, estimated by the World Bank at about 28 million units, experts insist, cannot be closed without long-term, affordable mortgage financing.

Looking into their crystal balls, analysts said sustained demand across residential housing, digital infrastructure, neighbourhood retail outlets and office spaces will underpin an anticipated moderate growth in the sector, with the Ministry of Finance Incorporated Real Estate Fund (MREIF) emerging as a major catalyst.

The MREIF, riding on the N1 trillion fund, structured as a public-purpose, private sector–led initiative, is designed to address the nation’s deep housing deficit while stimulating construction and allied industries.

The MREIF seeks to address this by providing funding to developers on the supply side and low-cost mortgages to homebuyers on the demand side.

According to the Head of ARM Investment Managers, Biyi Adekunbi, the fund offers mortgages at interest rates as low as 12 per cent, with repayment tenors of up to 20 years. He said the structure, backed by federal government participation and private capital, was designed to ensure stability and sustainability.

“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 in both the public and private sectors, self-employed Nigerians who meet income and credit criteria, and Nigerians in the diaspora seeking home ownership.

ARM Investment Managers, the fund managers, have so far raised N250 billion for on-lending through primary mortgage banks, with N100 billion contributed by the federal government and the balance sourced from the private sector. Several mortgage banks have already begun accessing the facility. Homebase Mortgage Bank recently announced it secured an initial N3.5 billion tranche, which it said would be deployed to expand access to affordable housing nationwide.

Industry players believe such initiatives, alongside government-backed infrastructure projects like the Renewed Hope Housing Scheme and the Lagos–Calabar Coastal Highway, could significantly lift sector performance in 2026. However, they argue that the full impact will only be realised if government reduces the burden of infrastructure provision on developers and harmonises multiple taxes across states and local governments.

Growth, they say, is likely to remain concentrated in major urban centres such as Lagos, Abuja and Port Harcourt, driven by rapid urbanisation, population growth and rising interest from diaspora investors.

Chief Executive, M.I. Okoro and Associates, Dr. Meckson Okoro, identified access to finance, land availability and infrastructure as the critical factors shaping housing affordability in the new year. He called for direct land allocation by government and greater public investment in roads, power, water and mass transit systems to reduce overall housing costs.

“If government provides basic infrastructure, developers will not have to price those costs into homes,” Okoro said. He also advocated integrating solar power solutions into federal housing estates to cut energy costs and reduce reliance on generators.

Diaspora investors, while eager to participate, continue to raise concerns over fraud and weak enforcement. A diasporan and Captain, Nigeria UK Golfing Association, Mr Fred Adegeye, lamented what he described as widespread losses suffered by Nigerians abroad at the hands of fraudulent developers, land grabbers and even family members.

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“An uncountable number of Nigerians in the UK, US and Canada have lost millions to fraud.If stricter laws are enforced and people see that offenders are punished, confidence will return. I speak from personal experience,” Adegeye said.

Tax reforms introduced by the federal government are also expected to play a defining role in shaping market outcomes in 2026. The President ,Nigerian Institution of Estate Surveyors and Valuers, Mr Victor Alonge, said the new tax regime would have a positive impact on real estate investment and home ownership.

“The new tax law is actually a positive thing for the real estate sector,” Alonge said.

He explained that small-scale businesses within the construction value chain had been exempted from certain taxes, describing the approach as consistent with practices in advanced economies.

According to him, value-added tax has been removed for the informal segment of the construction industry, while larger firms can offset some VAT costs through incentives such as support for local production.

“These savings will ultimately strengthen mortgage financing and improve access to housing. So it’s something we need to see as positive for our industry,”  he said.

Chief Operating Officer , QShelter Ltd., Mr Adegbenga Alamu, said the reforms would also reduce borrowing costs for homebuyers. “The interest paid on a mortgage is now deductible before tax computation, making borrowing cheaper.For those of us from banking, if I have cash, I would borrow. Debt is cheaper and better with the new law,” he said.