Authored by the expert who managed and guided the team behind the Nigeria Property Pack
Everything you need to know before buying real estate is included in our Nigeria Property Pack
Buying a two or three-bedroom apartment in central Lagos costs ₦75-180 million today, while comparable rental units range from ₦1.8-10.8 million annually. Banks require 10-30% down payments for mortgages with interest rates from 9.75% (government schemes) to 28% (commercial banks), making ownership challenging for most Nigerians.
Property prices in Lagos have grown steadily over the past five years, with a 39.5% increase in 2024 alone, and experts predict continued annual appreciation of 5-15% through 2030. While ownership offers long-term wealth building potential with rental yields of 6-8%, the substantial upfront costs and ongoing expenses like land use charges make renting the more practical choice for many residents, especially those planning shorter-term stays or lacking significant capital.
If you want to go deeper, you can check our pack of documents related to the real estate market in Nigeria, based on reliable facts and data, not opinions or rumors.
Buying property in Lagos requires ₦75-180 million upfront plus 10-30% down payment, offering 6-8% rental yields and 5-15% annual appreciation. Renting costs ₦1.8-10.8 million annually with greater flexibility but no equity building.
The decision depends on your financial capacity and timeline - buy if you have substantial capital and plan to stay 5+ years, otherwise rent until you're property-ready.
| Factor | Buying Property | Renting Property |
|---|---|---|
| Initial Cost | ₦75-180 million + 10-30% down payment | ₦1.8-10.8 million annually |
| Mortgage Interest | 9.75% (govt) - 28% (commercial) | N/A |
| Annual Appreciation | 5-15% expected through 2030 | No equity building |
| Rental Yield | 6-8% if rented out | N/A |
| Ongoing Costs | Land use charge (0.39%), service charges | Annual rent increases (5-10%) |
| Flexibility | Limited - difficult to sell quickly | High - can relocate easily |
| Best For | 5+ years stay, wealth building | Short-term, limited capital |
How much does it cost to buy a two- or three-bedroom apartment in a safe, central part of Lagos today?
As of September 2025, purchasing a two-bedroom apartment in safe, central Lagos areas like Ikoyi, Victoria Island, Lekki, or Yaba costs between ₦75-175 million.
Three-bedroom apartments in these same premium locations range from ₦120-180 million. These prices reflect properties in well-secured estates with proper infrastructure, reliable power supply, and good road access.
The most expensive properties are found in Ikoyi and Victoria Island, where two-bedroom units can reach ₦175 million, while more affordable options exist in emerging areas like Yaba and Surulere. Properties in gated estates with additional amenities like swimming pools, gyms, and 24-hour security command premium prices.
Location within each neighborhood significantly impacts pricing - waterfront properties, those near major business districts, or apartments in newly developed estates typically cost 20-30% more than comparable units in less prestigious sections of the same area.
It's something we develop in our Nigeria property pack.
What are the average monthly rents for a comparable two- or three-bedroom apartment in those same areas?
Monthly rental costs for two-bedroom apartments in central Lagos range from ₦150,000 to ₦650,000, translating to annual rents of ₦1.8-7.8 million.
Three-bedroom apartments command higher rents of ₦250,000-900,000 monthly, or ₦3-10.8 million annually. Premium locations like Victoria Island and Ikoyi sit at the upper end of these ranges.
Rental prices vary significantly based on specific location, property condition, and amenities offered. Newly built apartments with modern fittings, reliable generators, water treatment plants, and comprehensive security systems command premium rents.
Mid-market areas like Yaba and Surulere offer more affordable options, with two-bedroom apartments typically renting for ₦150,000-300,000 monthly. Remember that in Nigeria, rent is typically paid annually in advance, requiring tenants to budget for substantial upfront payments.
Additional costs include agency fees (10-15% of annual rent), legal fees (5-10%), and service charges that can add ₦50,000-500,000 annually depending on the estate's amenities.
What kind of down payment do banks in Lagos usually require for a mortgage, and what are the current mortgage interest rates?
Nigerian banks typically require down payments of 10-30% of the property value, depending on the mortgage type and lender.
Government-backed mortgages through the Ministry of Finance Real Estate Investment Fund (MREIF) require only 10% down payment with interest rates of approximately 9.75% for up to 20 years. However, these loans cap at ₦100 million and require minimum monthly income of ₦200,000.
Commercial banks demand higher down payments of 20-30% with interest rates ranging from 15-28% annually. Standard Chartered, for example, requires minimum 20% equity contribution with loan tenure typically capped at 15-20 years.
The mortgage approval process involves rigorous income verification, credit checks, property valuation, and title document verification. Additional costs include legal fees, perfection fees for title transfer, and insurance requirements.
For a ₦100 million property, you'd need ₦10-30 million down payment depending on the lender, making mortgage financing accessible mainly to high-income earners or those with substantial savings.
How stable are property prices in Lagos over the past five years, and are they expected to go up or down in the next five?
Lagos property prices have demonstrated strong upward momentum over the past five years, with particularly dramatic growth in 2024 showing a 39.5% increase.
Average annual price appreciation has ranged from 5-15% over the five-year period, driven by population growth, infrastructure development, and persistent housing shortages. Some premium areas like Ibeju-Lekki have seen land values increase by over 300% in the past decade.
For the next five years through 2030, real estate experts predict continued annual price increases of 5-15%, with growth concentrated in specific corridors benefiting from infrastructure projects. The Lekki corridor, areas near the new international airport, and tech hubs like Yaba are expected to see strongest appreciation.
Key growth drivers include Lagos's population increasing by 500,000-600,000 annually, major infrastructure projects like the Fourth Mainland Bridge and Lagos Metro Rail, and the city's role as Nigeria's economic powerhouse attracting both local and international investment.
However, high inflation and interest rates may moderate growth in some segments, making location selection crucial for investment success. Properties in well-planned estates with clear titles and good infrastructure are expected to outperform the general market.
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What are the ongoing costs of owning a property in Lagos, like land use charges, service charges, and maintenance fees?
Property ownership in Lagos involves several recurring costs that buyers must factor into their long-term budgets.
Land Use Charge is the primary government tax, calculated at 0.0394-0.394% of the property's assessed value annually. For a ₦100 million property, this translates to ₦39,400-394,000 per year paid to Lagos State.
Service charges in gated estates range from ₦50,000-500,000 annually, covering security, estate maintenance, waste management, and sometimes backup power generation. Premium estates with extensive amenities like swimming pools, gyms, and 24-hour security charge higher fees.
Maintenance costs vary but expect significant annual expenses for repairs, generator maintenance, water treatment, pest control, and property upgrades. Well-maintained properties typically require ₦100,000-500,000 annually in maintenance depending on size and age.
Additional ownership costs include property insurance, legal fees for transactions (1.5-3% of property value), and Governor's Consent fees when selling or transferring ownership. These costs can add up to 1-2% of the property value annually.
How much rent could you realistically earn each month if you decided to let out the property instead of living in it?
Rental income potential depends heavily on location, property condition, and target tenant market in Lagos.
Two-bedroom apartments in central Lagos can generate ₦200,000-650,000 monthly rent, while three-bedroom units command ₦300,000-900,000 monthly. Premium properties in Ikoyi and Victoria Island achieve the highest rents due to expatriate and high-income local demand.
Net rental yields typically range from 4.5-8% annually after accounting for vacancy periods, maintenance costs, and management fees. Mid-market areas often provide better yields (6-8%) compared to luxury segments (4-6%) due to lower purchase prices relative to rental income.
Short-let rentals (Airbnb-style) can generate higher returns, with well-managed properties earning ₦10,000+ daily rates in prime locations. However, this requires more intensive management and marketing efforts.
Realistic gross monthly rental income for a ₦100 million property would be ₦400,000-700,000, translating to 4.8-8.4% annual yield before expenses. Success depends on professional property management, regular maintenance, and understanding tenant preferences in your target market.
What is the average vacancy rate for rental properties in Lagos, and how long does it usually take to find tenants?
Vacancy rates in Lagos vary significantly by location and property type, with central areas generally experiencing lower vacancy periods.
Central Lagos averages 11-23% vacancy rates, with prime zones like Ikoyi and Victoria Island experiencing higher vacancy rates than mid-market areas due to limited pool of high-income tenants. Mid-market neighborhoods often have lower vacancy rates due to stronger demand from middle-income earners.
Well-priced properties in sought-after neighborhoods typically take 2-6 weeks to find suitable tenants. Properties with competitive rents, good maintenance, and desirable amenities secure tenants faster than overpriced or poorly maintained units.
Factors affecting vacancy rates include property condition, rental pricing relative to market rates, location accessibility, and availability of amenities like reliable power and water supply. Properties in areas with good infrastructure and security find tenants more quickly.
Seasonal patterns affect rental demand, with higher activity at the beginning of the year and during corporate relocation periods. Understanding these cycles helps landlords optimize timing for tenant searches and rental rate adjustments.
How does inflation in Nigeria affect both rental prices and property values, and what does that mean for long-term affordability?
Nigeria's high inflation environment significantly impacts both rental prices and property values, creating complex affordability challenges.
Inflation rates reaching 30%+ in recent years have driven up construction costs, land prices, and overall living expenses, directly pushing up both rental rates and property purchase prices. Property has become a hedge against inflation for wealthy Nigerians and diaspora investors.
Rental prices typically increase 5-10% annually, often tied to inflation rates, while property values have appreciated 8-15% annually in prime areas. However, real returns adjusted for inflation are more modest - a property appreciating 15% annually in a 30% inflation environment actually loses purchasing power.
For tenants, inflation erodes purchasing power while rents increase, making housing increasingly unaffordable for middle and lower-income earners. Property owners benefit from nominal value increases but must factor in higher maintenance costs and taxes that also rise with inflation.
Long-term affordability continues to decline as property prices outpace income growth for most Nigerians. This creates opportunities for investors with capital but makes homeownership increasingly challenging for average earners, potentially leading to social and economic tensions in the housing market.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Nigeria versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What legal or administrative challenges might you face when buying property in Lagos, such as land title verification or governor's consent?
Property acquisition in Lagos involves complex legal processes that require careful navigation to avoid costly mistakes.
Land title verification is crucial as most property fraud stems from fake or contested titles, errors in land registry records, or lack of proper documentation. Buyers must conduct thorough due diligence including title searches, survey verification, and chain of ownership investigation.
Governor's Consent is mandatory for every property transfer in Lagos State, often causing delays and additional costs. The process can take several months and requires extensive documentation including tax clearance, survey plans, and proof of purchase.
Common challenges include multiple ownership claims on single properties, incomplete or fraudulent documentation, encroachments, and properties built without proper approvals. Working with reputable estate agents and experienced property lawyers is essential to navigate these risks.
The Lagos State Government has introduced digital reforms including the e-GIS portal for online title searches and consent applications, improving transparency and reducing fraud risk. However, buyers must still exercise extreme caution and engage qualified professionals throughout the acquisition process.
What hidden costs come with renting in Lagos, like agency fees, legal fees, and annual service charge increases?
Renting in Lagos involves several upfront and ongoing costs beyond the annual rent that tenants must budget for.
Agency fees typically cost 10-15% of the annual rent as a one-time payment to the real estate agent who facilitated the transaction. Legal fees add another 5-10% of annual rent for documentation and agreement preparation.
Caution deposits usually equal 10% of annual rent, held by the landlord as security for damages or unpaid utilities. Some landlords require additional security deposits equivalent to one year's rent, creating substantial upfront capital requirements.
Service charges in estate properties can increase 10-20% annually, often without contractual caps, impacting long-term affordability. These charges cover estate maintenance, security, and amenities but can become significant cost burdens over time.
Additional hidden costs include utility connections, generator fuel and maintenance (due to unreliable public power), water treatment, and periodic "facility upgrades" that estates may charge tenants. It's something we develop in our Nigeria property pack.
How easy is it to sell a property in Lagos when you need liquidity, and how much time does it usually take to complete a sale?
Property liquidity in Lagos varies significantly based on location, pricing, and documentation quality, with sales typically taking 2-6 months to complete.
Properties with clear titles, proper documentation, and competitive pricing in desirable locations like Victoria Island, Ikoyi, or well-planned Lekki estates sell faster than those with complex ownership issues or unrealistic pricing.
The sales process involves property valuation, marketing, buyer identification, negotiation, due diligence, and legal documentation completion. Each stage can face delays, particularly during title verification and Governor's Consent processing.
Market conditions affect liquidity - properties in high-demand areas maintain better liquidity than those in oversupplied luxury segments or areas with infrastructure challenges. Cash buyers facilitate faster transactions than those requiring mortgage financing.
To improve sale prospects, sellers should ensure all documentation is current, price competitively based on recent comparable sales, and work with reputable agents who understand the local market dynamics and buyer preferences.
How secure is property ownership in Lagos in terms of fraud risk, disputes, and government policy changes compared to the flexibility of renting?
Property ownership security in Lagos faces significant challenges that buyers must understand and mitigate through proper planning and professional guidance.
Fraud risk remains high for unwary buyers due to fake titles, land grabbing incidents, multiple sales of single properties, and unregistered conveyances. Using trusted agents, experienced lawyers, and conducting thorough due diligence are essential protections.
Government policy risks include changes to land use charges, property taxes, and development regulations that can affect property values and ongoing costs. However, outright government seizure is rare for properties with proper documentation and compliance.
Property ownership provides 99-year legal protection under Nigerian law, but disputes over boundaries, ownership claims, and inheritance issues can create costly legal battles. Clear documentation and proper legal processes minimize these risks.
Renting offers greater flexibility for relocation, lower capital risk, and freedom from property disputes, making it suitable for those prioritizing mobility over wealth building. However, landlords may impose sudden rent increases, poor service charge transparency, or terminate leases with limited notice.
The choice between ownership and rental depends on risk tolerance, capital availability, and long-term plans - ownership builds wealth but requires significant capital and risk management, while renting provides flexibility at the cost of equity building opportunities.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
The Lagos property market presents both compelling opportunities and significant challenges for potential buyers and renters in 2025.
Success requires substantial capital, thorough market knowledge, and professional guidance to navigate the complex legal and financial landscape while building long-term wealth through real estate investment.
Sources
- TheAfricanvestor - Worth it buying property in Lagos
- Numbeo - Cost of Living in Lagos
- TheAfricanvestor - Lagos Market Data
- Vala Homes - Mortgage in Nigeria 2025
- Standard Chartered Nigeria - Mortgage Loans
- TheAfricanvestor - Lagos Price Forecasts
- Estate Intel - Nigerian Mortgage Rates
- TheAfricanvestor - Lagos Rental Yields