Nigeria plans real estate escrow but experts warn of execution gap
Nigeria’s proposal to mandate escrow accounts for off-plan property sales aims to restore investor confidence, but experts warn the reforms will fail without robust construction monitoring to ensure homes are actually built.
Nigeria’s Federal Government has announced a sweeping overhaul of its real estate sector, centering on mandatory developer licensing and regulated escrow accounts to protect off-plan buyer funds. The reforms were unveiled by Minister of Housing and Urban Development Engr. Muttaqha Rabe Darma at the BusinessDay Abuja Real Estate Conference 2026. The proposed National Housing and Built Environment Regulation Policy aims to ban unlicensed developers from marketing properties and establish a National Housing Industry Data Observatory.
Alongside regulatory oversight, the government is targeting mortgage liquidity to stimulate the market. The Federal Mortgage Bank of Nigeria will raise its mortgage ceiling to N85 million and facilitate at least 2,000 mortgages annually. Furthermore, contributors to the National Housing Fund would be permitted to use up to 25% of their Retirement Savings Accounts as housing equity. A National Rent Registry and Land4Growth electronic certificate programme are also planned.
Despite these measures, property market professionals warn that financial safeguards alone will not resolve the sector’s structural flaws. "Escrow addresses where the money sits. It does not address what the money builds," said Olufemi Adeleke, Founder of Murals Nigeria Limited. Without physical oversight, an escrow account merely protects cash that may still be tied to a stalled or abandoned project.
Oluwakemi Adeyemo, Chief Executive Officer of Premier Real Estate Advisory and Marketing Company, noted that many buyer losses stem from inadequate due diligence rather than the absence of financial safeguards. She warned that escrow and licensing alone are not the best solutions to the core challenges facing off-plan property investors, urging the government to prioritize enforcing existing regulations instead.
Experts suggest the framework must integrate financial controls with project execution monitoring. Festus Adebayo, Executive Director of the Housing Development Advocacy Group, called for an independent regulator with the power to sanction operators and a mandatory pre-marketing project registration system to verify titles and financial capacity.
Technology could bridge the gap between capital protection and physical delivery. Eniola Ayomiotan Olukoya, Chief Executive Officer of GovTech contractor Aout-18 Technologies Ltd, recommended a single digital platform tying escrow disbursements to independently verified construction milestones. Assigning unique identification numbers to properties and listings would also curb the multiple sales of land that have eroded market confidence.
The government’s proposal responds to documented market failures, including delayed land allocations, shifting delivery timelines and unexpected cost demands that have long deterred institutional and retail capital. However, the administration has not yet published a draft framework or detailed enforcement mechanisms. Until execution capacity is proven, these reforms are unlikely to immediately unlock significant new investment flows into Nigerian real estate.
