High Interest Rates Put Repayment Pressure On Property Developers Amid N814.996bn Bank Loans
Property developers in Nigeria are facing severe financial strain due to high interest rates and rising construction costs. Many firms are abandoning bank financing as borrowing costs reach levels that threaten project profitability.
Why it matters
The crisis in the real estate sector threatens housing supply and economic growth in Nigeria, as developers struggle to maintain project viability.
Nigeria’s high interest-rate environment is putting increasing pressure on property developers, with those relying on bank loans struggling to service their facilities as borrowing costs erode project returns and threaten the completion of housing schemes.
Commercial bank lending rates currently range between 23 and 38 per cent, depending on the lender, facility and borrower’s risk profile, making the cost of credit a major impediment to new investment in residential real estate.
LEADERSHIP’s checks showed that banking industry credit to the real estate sector rose from N792.708 billion at the end of last year to N814.996 billion in the first quarter of 2026.
The situation is compounded by rising costs of cement, steel, labour, land and other construction inputs, while weak purchasing power limits the ability of prospective homebuyers and tenants to absorb higher property prices and rents.
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