Rise in housing costs push homeownership out of reach – Point1 Homes CEO

The Chief Executive Officer, Point1 Homes and Properties Nigeria Limited, Samuel Akeba, bares his mind on some of the challenges bedevilling the real estate industry in this interview with JOSEPHINE OGUNDEJI

Would you say your industry is over-regulated or under-regulated?

Nigeria’s real estate industry is plagued not by a lack of regulations but by weak enforcement in critical areas such as land documentation, construction standards, and consumer protection. While numerous laws exist to guide land ownership, building safety, and property transactions, their implementation remains inconsistent. This gap has created an environment where fraudulent practices, substandard construction, and bureaucratic inefficiencies thrive, making real estate investments riskier than they should be.

One of the most pressing issues is the flawed land documentation and title registration process. The Land Use Act of 1978 centralises land ownership under state governors, requiring individuals and businesses to obtain Certificates of Occupancy. However, the process is slow, expensive, and riddled with corruption, leading to frequent land disputes and cases of multiple sales of the same property. The absence of a centralised, digital land registry further complicates matters, allowing forgeries and land-grabbing practices to flourish unchecked.

Construction standards are another area where enforcement is weak, often with deadly consequences. Despite regulatory bodies such as the Standards Organisation of Nigeria and the Lagos State Building Control Agency setting guidelines, many developers evade proper approvals and use substandard materials. The result is a rise in building collapses, causing loss of life and property. Without strict oversight and accountability, developers who cut corners continue to operate with impunity, undermining public trust in the sector.

Real estate fraud is also rampant due to a lack of oversight. From fake property sales to fraudulent investment schemes promising unrealistic returns, unsuspecting buyers and investors often fall victim to scams. While associations like the Real Estate Developers Association of Nigeria exist, many operators function outside any formal regulatory framework. The failure to track and penalise dishonest developers only emboldens more players to exploit the system, further eroding confidence in the market.

Additionally, Nigeria’s mortgage and consumer protection frameworks remain largely ineffective. Institutions like the Federal Mortgage Bank of Nigeria and the National Housing Fund were established to provide affordable home financing, yet access remains limited due to bureaucracy and corruption. Many Nigerians resort to informal payment structures with private developers, often facing hidden charges, delayed projects, or outright fraud with little legal recourse. The absence of strong consumer protection laws means buyers bear the brunt of regulatory failures.

The consequences of these lapses are far-reaching. Weak enforcement increases investor risk, discourages foreign and local investment, and forces developers to navigate an unpredictable regulatory environment, ultimately driving up costs. The persistence of substandard buildings endangers lives, while public distrust in the real estate market limits formal property ownership, keeping many transactions within informal systems that lack legal security.

To address these challenges, Nigeria does not need more laws; it needs better enforcement of existing ones. Strengthening regulatory institutions, increasing transparency in land administration through a digital land registry, holding developers accountable for project failures, and ensuring consumer protection through stricter oversight are crucial steps forward. Additionally, setting up specialised real estate courts could fast-track property disputes and prevent the prolonged litigation that deters investment.

Ultimately, the key to a thriving real estate sector in Nigeria lies in making regulations work in practice, not just on paper. Until there is a commitment to proper enforcement, the industry will remain plagued by uncertainty, inefficiencies, and fraudulent practices that undermine its true potential.

To what extent have bureaucratic red tape in property registration and title documentation hindered real estate development?

The paperwork involved in registering a property in Nigeria is frustratingly slow and complex. Getting a Certificate of Occupancy or Governor’s Consent can take years, pushing many developers to either abandon projects or take shortcuts. This discourages investment and makes it harder for Nigerians to buy properties with proper titles. If the process were digitalised and made more transparent, it would boost confidence in the industry and make things easier for everyone.

How do inflation and rising construction costs make homeownership increasingly unattainable for Nigerians?

Inflation is exerting immense pressure on Nigeria’s real estate sector, making property development increasingly expensive and inaccessible to many potential homeowners. At an inflation rate of 23.18 per cent, the cost of essential building materials like cement, iron rods, and tiles has surged dramatically. Developers, unable to absorb these rising costs, inevitably transfer them to buyers, further driving up property prices. This situation is particularly concerning in a country where homeownership is already a challenge due to high land costs and limited access to affordable mortgages. Without strategic interventions, the dream of owning a home will remain out of reach for the average Nigerian, exacerbating the housing deficit.

A major factor worsening this crisis is the depreciation of the naira, which increases the cost of importing construction materials. Since Nigeria relies heavily on foreign supplies for items like fittings, finishing materials, and certain construction technologies, the weaker currency means developers pay more for imports. This dependency exposes the sector to global economic fluctuations, making stability elusive. If the government does not take steps to boost local production of essential building materials, the real estate market will continue to struggle with affordability issues, limiting both residential and commercial developments.

The solution lies in proactive government policies that support local production and encourage affordable housing initiatives. Incentives such as tax breaks for manufacturers of cement, steel, and other key materials could help reduce reliance on imports, stabilising construction costs in the long run. Additionally, policies that promote public-private partnerships for affordable housing could ease the burden on developers while making homeownership more accessible to low- and middle-income earners. If Nigeria is to navigate the current economic challenges and sustain real estate growth, prioritising local production and affordability-driven policies must be at the core of its strategy.

To what extent has building collapses impacted trust in the Nigerian real estate sector, and what reforms are needed?

Every time a building collapses, trust in the real estate sector takes a massive hit. People start to wonder if developers are cutting corners and if their own homes are safe. Sadly, many of these tragedies happen because of poor construction practices, substandard materials, or outright negligence. We need stricter inspections, tougher penalties for those who violate building codes, and, most importantly, accountability. If people knew that developers who compromised on quality would face serious consequences, we’d see fewer disasters.

How does Nigeria’s growing slum population reflect the failure of past housing policies?

The continuous rise of slums in Nigeria is a direct consequence of the severe shortage of affordable housing for low-income earners. For years, housing policies have primarily catered for the high-end market, focusing on luxury apartments and gated estates while neglecting the urgent need for low-cost housing. This imbalance has left millions of Nigerians with no viable alternative but to settle in informal, unplanned settlements that lack proper infrastructure, sanitation, and security. The situation is worsened by the near-inaccessibility of mortgages due to high interest rates, stringent eligibility criteria, and the general instability of Nigeria’s financial system. Without affordable financing options, homeownership remains an unattainable dream for most working-class Nigerians, forcing them into overcrowded and unsafe living conditions.

To reverse this trend, the government must take deliberate steps to invest in social housing projects that prioritise affordability and accessibility. This can be achieved through large-scale public housing initiatives, subsidies for private developers willing to build low-cost units, and policies that encourage innovative construction methods such as prefabricated homes and 3D printing technology. Additionally, providing flexible payment structures, such as rent-to-own schemes and low-interest housing loans, would enable more Nigerians to transition from slums to proper housing. Beyond just building homes, infrastructure development must keep pace with urban expansion to prevent the emergence of new informal settlements. Roads, electricity, water, and waste management systems must be integrated into housing projects from the onset to create sustainable communities rather than just clusters of buildings. If these steps are taken, Nigeria can significantly curb the growth of slums and provide dignified living conditions for its growing population.

How are fraudulent real estate schemes affecting homebuyers and investors in Nigeria?

Real estate fraud is everywhere, and it’s hurting both homebuyers and investors. From fake land titles to properties being sold to multiple buyers, many people have lost their hard-earned money. This lack of trust slows down the market because potential investors hesitate to put in their money. The key to avoiding scams? Proper due diligence, verify land titles at the Land Bureau, work with reputable real estate companies, and never rush into a deal. The government should also crack down on fraudsters with stricter laws and real consequences.

How can mortgage schemes be made more accessible in Nigeria, considering its high cost?

Let’s be real, mortgages in Nigeria are ridiculously expensive. Interest rates can go as high as 20 per cent, making it almost impossible for the average Nigerian to own a home. If we want more people to afford houses, mortgage rates need to be lower, and repayment terms need to be more flexible. The Federal Mortgage Bank of Nigeria should expand its reach, and public-private partnerships should introduce alternative financing models. Owning a home shouldn’t be a luxury—it should be accessible to hard-working Nigerians.

Would you say that they are cutting corners due to Nigeria’s economic situation?

Sadly, yes. With inflation and rising costs, some developers try to save money by using substandard materials or skipping essential construction steps. But while this may seem like a short-term fix, it’s a dangerous gamble that can lead to building collapses. No matter how tough the economy is, quality should never be compromised. We need stronger enforcement of building regulations to ensure developers do things the right way.

What is your firm, Point1 Homes, doing to bridge the housing deficit in Nigeria?

At Point1 Homes, we’re committed to making homeownership easier for Nigerians. We focus on providing both affordable and premium housing, with flexible payment plans that help buyers spread costs over time. We also ensure all our properties have genuine titles, so buyers don’t have to worry about legal troubles. Our goal is simple: make owning a home in Nigeria as stress-free as possible.

With Nigeria battling inflation at the moment, would you say the real estate industry provides an ample window of opportunity to potential investors?

Yes! Real estate remains one of the safest investments, even with inflation. Unlike cash, which loses value over time, land and properties appreciate, especially in high-growth areas. Those who invest now will likely see their properties increase in value as development continues. Plus, rental income provides a solid hedge against inflation, making real estate a smart long-term play.

There have been criticisms that most developmental projects in Lagos State are made for the upper class. Is this true?

It’s hard to argue with this criticism because a lot of new developments in Lagos are targeted at high-income earners. The main reason? High construction costs and the need for quick returns make luxury housing more attractive to developers. But this isn’t sustainable; there needs to be a shift toward middle- and low-income housing.

What are the potential long-term consequences of an unchecked rental increase and escalating building material costs on the homeownership rate in the country?

If rent and building costs keep rising unchecked, homeownership will become a distant dream for many Nigerians; this will widen the gap between the rich and poor, increase homelessness, and put more pressure on unregulated housing areas. In the long term, this could hurt the economy by limiting wealth creation through property ownership. We need government policies that regulate rent increases and promote affordable housing solutions before things get worse.

According to a report, over 70 per cent of the global population will migrate to urban centres by 2050. How ready is the Nigerian real estate industry for this imminent surge?

Honestly, Nigeria isn’t ready. Urban infrastructure isn’t growing fast enough to accommodate the increasing population, and without proper planning, we’ll see even more slums, traffic congestion, and housing shortages. The solution lies in smart urban planning—better road networks, efficient public transport, and sustainable housing projects. If we start preparing now, we can turn this challenge into an opportunity for economic growth and urban transformation.