Africa’s housing finance deficit hits $1.4
Global housing finance is entering a period of rapid expansion, but across Africa the widening gap between capital flows and housing demand is becoming more pronounced, with the continent now
- By Okwy Iroegbu-Chikezie
Global housing finance is entering a period of rapid expansion, but across Africa the widening gap between capital flows and housing demand is becoming more pronounced, with the continent now facing an estimated $1.4 trillion shortfall in housing finance, according to the International Finance Corporation (IFC).
The IFC estimated that the continent’s housing finance gap stands, alongside a rapidly rising housing deficit projected to hit 130 million units by 2030.
Earlier estimates place the current shortfall at about 50 million units, highlighting the speed at which demand is outpacing supply.
While global markets surge—driven by digital lending, urbanisation and stronger policy support for affordable housing, analysts noted that Africa continues to lag, constrained by weak mortgage systems, limited long-term funding and rising public debt that is shrinking governments’ ability to invest in housing infrastructure.
Broader projections indicate the global residential mortgage market could grow from about $15 trillion in 2025 to nearly $23 trillion by 2033, with parallel estimates from TechSci Research putting the housing loan market on track to rise from $5.84 trillion in 2025 to $9.68 trillion by 2031. Analysts say the expansion reflects “a combination of technology-driven lending innovation, population growth in urban centres, and deliberate policy interventions to boost homeownership.”
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UN-Habitat warned that developing countries, particularly in Africa, are not keeping pace.
Speaking at the 19th edition of the Africa International Housing Show in Abuja, Minister of Housing and Urban Development, Ahmed Musa Dangiwa, underscored the urgency of addressing both supply and financing constraints.
“Across Africa, millions of families still cannot afford decent homes even when they are available. This administration is not just building houses; we are fixing the structural and macroeconomic foundations that will make housing truly affordable and sustainable for Nigerians today and in the future,” Dangiwa said.
Within Africa, Nigeria and South Africa dominate the housing finance landscape, accounting for roughly 45 per cent and 40 per cent of the market respectively.
Yet Nigeria’s mortgage penetration remains below 0.5 per cent of gross domestic product, one of the lowest globally. The country’s total mortgage portfolio is estimated at between N500 billion and N700 billion (approximately $300 million to $450 million) over the 2023 to 2025 period.
Despite these constraints, the Minister said the Federal Government is pursuing a multi-pronged strategy to unlock both housing supply and finance.
Central to this effort is the Renewed Hope Housing Programme, a three-tier initiative comprising Renewed Hope Cities, Estates and Social Housing Estates, designed to scale up delivery across income segments. The government has also mobilised over N70 billion in private capital through public-private partnerships to accelerate large-scale urban housing projects.
Dangiwa highlighted the role of the Federal Mortgage Bank of Nigeria in expanding access to housing finance through products such as the Rent-to-Own Scheme and the Rental Assistance Programme, both targeted at low- and middle-income earners. He also pointed to the planned MOFI Real Estate Investment Fund as a key instrument to deepen long-term mortgage financing at more affordable rates.
“We are introducing innovative financing models that will unlock liquidity into the housing sector and make mortgages more accessible to ordinary Nigerians,” he said.
In a further push to decentralise implementation, he said the Federal Government plans to launch a state-by-state homeownership and housing development campaign aimed at strengthening sub-national capacity and unlocking local investment.
“We will embed Housing Reform Champions in state governments, convene state housing roundtables, and provide hands-on support to structure viable housing projects and unlock financing opportunities,” Dangiwa explained.
Industry experts say Nigeria’s housing finance market could grow to between $1 billion and $2 billion by 2030 if reforms are sustained, with the mortgage portfolio potentially expanding to between ₦2 trillion and N3 trillion. However, this remains far below the estimated N20 trillion to N30 trillion required annually to close the housing gap.
As global housing finance surges ahead, the contrast with Africa highlights the urgency of structural reform. For Nigeria, analysts say the path forward lies in aligning policy, finance and land administration systems to unlock scale and improve affordability.
“Housing is not a privilege. It is a right. When we invest in housing, we invest in people, jobs, cities, and our collective future,” Dangiwa said.
President, Nigeria Institution of Estate Surveyors & Valuers, Mr. Kunle Alonge said I think the government should provide incentives, enable the environment, and allow the private sector to come in, in a much more regulated way to deliver. And that’s what we have in developed countries; as well you have in Europe, all over the world, where they have been able to crack the housing challenges to a large extent, and that’s what we should also do in this country.
He commended the Renewed Hope Housing but added that it should be institutionalized to ensure that it is not just a policy of this government, but a national policy that will be enduring.
