Global housing finance is entering a period of rapid expansion, but across Africa the wide gap between capital flows and housing demand is becoming more apparent, with the continent now facing an estimated $1.4 trillion housing finance shortfall. International Finance Corporation (IFC).
The IFC estimates that the continent's housing finance gap is projected to reach 130 million units by 2030, along with a rapidly increasing housing deficit.
Earlier estimates put the current shortage at around 50 million units, highlighting the speed at which demand is outstripping supply.
While global markets have been boosted by strong policy support for digital lending, urbanization and affordable housing, analysts said Africa is lagging behind due to weak mortgage systems, limited long-term financing and rising public debt, which is undermining the ability of governments to invest in housing infrastructure.
Widespread projections indicate that the global residential mortgage market could grow from about $15 trillion in 2025 to about $23 trillion by 2033, with parallel projections from TechScience Research suggesting the home loan market could grow from $5.84 trillion in 2025 to $9.68 trillion by 2031. Analysts say the expansion reflects “a combination of technology-driven credit innovation, population growth in urban centers and deliberate policy intervention”. To promote home ownership.”
UN-Habitat warned that developing countries, especially 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, stressed the urgency of addressing both supply and financing constraints.
Dangiwa said, “Across Africa, millions of families still cannot afford decent homes even when they are available. This administration is not just building homes; we are fixing the structural and macroeconomic foundations that will make housing truly affordable and sustainable for Nigerians today and in the future.”
Within Africa, Nigeria and South Africa dominate the housing finance landscape, accounting for 45 percent and 40 percent of the market respectively.
Yet Nigeria's mortgage penetration remains below 0.5 percent of GDP, one of the lowest globally. The country's total mortgage portfolio is estimated to be between N500 billion and N700 billion (about $300 million to $450 million) over the period 2023 to 2025.
Despite these constraints, the minister said the federal government is adopting 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 increase delivery across all income sectors. The government has also mobilized over N70 billion of 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 increasing 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 people. He also pointed to the planned MOFI Real Estate Investment Fund as a key vehicle for deepening long-term mortgage financing at more affordable rates.
“We are introducing innovative financing models that will unlock liquidity in the housing sector and make mortgages more accessible to ordinary Nigerians,” he said.
In a further effort to decentralize implementation, he said the federal government plans to launch a state-by-state home ownership and housing development campaign aimed at strengthening sub-national capacity and unlocking local investment.
“We will engage housing reform champions in state governments, convene state housing roundtables, and provide practical assistance to structure viable housing projects and unlock financing opportunities,” Dangiwa explained.
Industry experts say if reforms are sustained, Nigeria's housing finance market could grow to between $1 billion and $2 billion by 2030, with the mortgage portfolio potentially expanding to between ₦2 trillion and N3 trillion. However, this is far less than the estimated N20 trillion to N30 trillion required annually to close the housing gap.
As global housing finance moves forward, the contrast with Africa highlights the urgency of structural reform. For Nigeria, analysts say the way 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,” Dangiva said.
President of the Nigeria Institution of Estate Surveyors and Valuers, Mr Kunle Alonge said I believe government should provide incentives, enable the environment and allow the private sector to come in in a more regulated manner. And this is what we have in developed countries; As you have in Europe, all over the world, where they have been able to meet the housing challenges to a great extent, and that is what we should do in this country as well.
He lauded Renewed Hope Housing but also said that it should be institutionalized to ensure that it is not just a policy of this government, but a national policy that will be sustainable.