CBN Signals a More Liquid Economy and What That Could Mean for Property Prices

Nigeria’s rising money supply is beginning to cast an important shadow over the country’s real estate sector, with new signals pointing to stronger domestic liquidity, improving credit conditions and shifting investor behaviour.

New data from the Central Bank of Nigeria shows that broad money supply (M3) climbed to ₦119.04 trillion in October 2025, up from ₦117.78 trillion in September, marking a ₦1.25 trillion or 1.06 percent month-on-month increase. Year-on-year, M3 expanded by ₦11.04 trillion, or 10.22 percent, compared with October 2024.
(Source: CBN Money and Credit Statistics)

Although these updates are often associated with banking trends and macroeconomic liquidity, they carry direct consequences for Nigeria’s property market. Rising money supply typically reflects a growing stock of cash and near-cash instruments across households, businesses and financial institutions, conditions that can influence everything from development financing to property prices.

Liquidity conditions shape real estate performance

The expansion in M3 follows the Monetary Policy Committee’s decision to lower the Monetary Policy Rate by 50 basis points to 27 percent in September, the first rate cut since 2020.
Rate adjustments of this kind, even modest ones, often work in tandem with liquidity growth to gradually soften borrowing conditions. For real estate developers, this can translate into improved access to construction financing and refinancing opportunities. For homebuyers, it may begin to influence mortgage pricing, even if mortgages in Nigeria remain sharply expensive relative to global norms.

The steady rise in M2 and narrow money (M1) also reflects stronger savings and deposit balances in the financial system. These balances often act as the backbone of housing investments in Nigeria, a country where many buyers rely on personal savings, cooperative contributions or informal financing for property acquisition. With M2 and M3 rising at similar rates, liquidity appears to be flowing through traditional savings and credit channels rather than speculative instruments, an indication that households may have greater financial room to consider land purchases or rental investments.

Domestic assets take the lead

A key driver behind the liquidity trend is the remarkable increase in Net Domestic Assets (NDA), which rose from ₦76.12 trillion in September to ₦84.23 trillion in October, amounting to an ₦8.11 trillion or 10.65 percent surge in a single month.
This is significant for the housing sector because NDA reflects the banking system’s claims on government and the private sector, two major participants in real estate development.

A rise of this magnitude suggests a notable increase in domestic credit. Banks appear to be expanding their exposure to local assets, which could include developer loans, construction facility refinancing, corporate property acquisition or broader private sector lending that indirectly supports real estate activity.

These credit dynamics are especially important at a time when developers face rising construction costs and inconsistent foreign capital inflows. Stronger domestic liquidity offers room for real estate firms to plan new projects, structure off-plan funding cycles more confidently and negotiate more favourable terms with lenders.

At the same time, the drop in Net Foreign Assets (NFA) from ₦41.66 trillion to ₦34.80 trillion, a sharp 16.45 percent decline month-on-month, highlights renewed external pressures on Nigeria’s financial system. With fewer foreign-denominated assets backing the system, the real estate industry could see renewed pressure on imported material costs, including cement inputs, finishing materials, fixtures and technical equipment.
This external weakness reinforces the importance of domestic credit as the primary engine of real estate activity in 2026.

Property market outlook shaped by liquidity and inflation dynamics

The increase in narrow money (M1), which rose to ₦39.35 trillion in October, signals that cash balances and current account holdings are still expanding. In a country where a large portion of real estate transactions are cash-based or short-term financed, higher M1 can directly influence transaction volumes in land and mid-market residential segments.

With inflation still elevated, rising liquidity often pushes investors towards asset classes that preserve value. Real estate, which has traditionally served as a hedge against currency volatility and inflation, is likely to absorb a share of this liquidity. As a result, land prices in high-demand zones may see renewed upward pressure and rental markets may continue to tighten due to sustained demand and limited new supply.

A shift toward a domestically driven real estate cycle

Taken together, the October 2025 liquidity figures suggest a real estate market increasingly shaped by domestic financial forces. Developers may rely more heavily on local banks, cooperatives and private investors, while foreign capital, affected by FX challenges, plays a more limited role.

This change could produce a market defined by more locally funded project pipelines, stronger interest in land banking, renewed off-plan development activity, continued upward pressure on construction costs and steady or rising property prices, particularly in urban centres.

As the CBN balances monetary easing with inflation control, the property sector is likely to respond to the direction of liquidity growth. If liquidity continues to expand while interest rates remain stable, the broader environment may support increased real estate transactions heading into 2026.