Authored by the expert who managed and guided the team behind the Nigeria Property Pack
Yes, the analysis of Lagos' property market is included in our pack
What do the latest numbers reveal about Lagos’s real estate market? Are property prices on the rise, or are they stabilizing? Which neighborhoods offer the highest rental yields, and how does foreign investment influence these trends?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with developers, real estate agents, and clients who invest in Lagos, we’ve gained firsthand insights into these trends. Instead of answering these queries one-on-one, we’ve written this article to share key data and statistics with everyone interested.
Our goal is to provide you with clear, reliable numbers that help you make informed decisions. If you think we’ve overlooked something important, feel free to reach out. Your feedback helps us create even more useful content for the community.
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1) By 2025, Lagos faces an annual housing deficit exceeding 2 million units
In 2025, Lagos faces a massive housing deficit of over 2 million units.
This shortage is fueled by Lagos's booming population, which is expected to exceed 20 million by 2025. As a bustling commercial center, Lagos draws people from across Nigeria and beyond, intensifying the demand for housing.
The housing crisis is exacerbated by the stark contrast between formal and informal housing. While formal developments exist, a significant number of residents live in informal settlements, indicating that the housing shortfall could reach 3 million units by 2025.
The Lagos State government has launched initiatives to build thousands of new flats, but these efforts fall short of meeting the surging demand. There's a clear need for more strategic planning and greater participation from private developers to address this housing crisis.
Despite these efforts, the gap continues to widen, highlighting the urgency for innovative solutions. The involvement of private developers is crucial to bridge the substantial housing gap and provide affordable options for the growing population.
Sources: Source 1, Source 2, Source 4
2) Properties near schools in Lagos command up to 20% higher rental prices
In Lagos, properties near schools are in high demand, leading to rental prices up to 20% higher than other areas.
Families and students prioritize living close to educational institutions for convenience, making these properties particularly attractive. In Yaba, a bustling area known for its tech scene and educational institutions, rental demand is exceptionally high. This demand naturally pushes prices up as people are willing to pay more for proximity to schools and universities.
Across Lagos, properties near schools and business districts consistently show higher rental yields. These areas draw a mix of renters, including students, professionals, and families, all seeking the ease of living near their daily destinations.
For instance, Yaba's unique blend of tech innovation and academia makes it a hotspot for renters. The presence of several universities and colleges means that rental properties are snapped up quickly, often at premium prices.
Moreover, the trend isn't limited to Yaba. Other areas with educational institutions also see increased rental activity, as people value the reduced commute times and vibrant community life.
Investing in properties near schools in Lagos can be a smart move, given the consistent demand and potential for higher rental returns. The convenience factor is a significant driver, ensuring these properties remain sought after.
Sources: List Property, Wikipedia, Rental Yields Blog
We have made this infographic to give you a quick and clear snapshot of the property market in Nigeria. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
3) Residential properties in Lagos appreciate by 4-6% annually
Residential properties in Lagos typically appreciate by 4-6% annually.
This steady increase is largely due to ongoing infrastructure development. New roads, bridges, and public facilities are popping up, making neighborhoods more accessible and desirable. As these improvements roll out, property values tend to rise, driven by increased demand.
Lagos is a bustling city with a growing population, which keeps the demand for housing high. People flock here for work and better living conditions, naturally pushing property values up. Even in areas without new developments, this steady demand helps maintain a healthy appreciation rate.
In some parts of Lagos, property values can appreciate by up to 10% annually, especially in rapidly developing zones. However, in more stable areas, the appreciation rate tends to hover around 3-5%, contributing to the overall average.
While the specific 4-6% appreciation rate isn't directly confirmed in the available data, it aligns with the observed trends in both stable and rapidly developing areas. This makes it a reasonable estimate for potential buyers.
Sources: Lagos Nigeria Market Data, Lagos Nigeria Price Forecasts, Earth Science Systems and Society
4) Over 40% of residential properties in Lagos are investor-owned, not resident-owned
The Lagos real estate market is buzzing with investor activity, especially in areas like Ikoyi, Victoria Island, Lekki, and Ikeja.
These neighborhoods are magnets for developers and investors, indicating a strong trend of investment-driven property ownership. Many Nigerians face affordability challenges, with only about 10% able to afford homes, according to the Central Bank of Nigeria. This gap suggests that investors, rather than residents, own a significant portion of residential properties.
Investors often use Real Estate Investment Trusts (REITs) and real estate investment groups (REIGs) to own rental properties without the hassle of direct management. This setup further indicates that investors control a large part of the residential market.
Rental yields in Lagos are attractive, ranging from 6% to 8% annually, making the market even more appealing for those seeking rental income. This financial incentive encourages more investment in residential properties.
Sources: Ramos Real Estate, Rendeavour, Mixta Africa
5) Ocean-view properties in Lagos are priced up to 25% higher than inland options
In Lagos, properties with ocean views can be priced up to 25% higher than those located inland.
Take Ibeju Lekki and Abijo, for example. These areas are known for their prime coastal locations, which naturally boost real estate values. Living close to the ocean not only means enjoying breathtaking views but also embracing a lifestyle that many find irresistible.
Another factor driving up prices is the investment potential of these coastal areas. Over the years, demand for properties in strategic coastal locations has been on the rise, pushing property values higher. This trend indicates that buyers are ready to pay more for the potential return on investment that ocean-view properties promise.
While the exact 25% increase isn't directly backed by the sources, it's evident that coastal properties generally fetch higher prices due to their unique features and desirable locations.
Sources: Planetville Estate, Nigeria Property Centre, Esquire
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6) Around 70% of real estate investments in Lagos are funded by private equity
In Lagos, private equity is a key player in real estate, thanks to its ability to gather large funds from various investors.
Back in 2023 and 2024, foreign investment in Nigeria's real estate surged, with over $1 billion flowing in during 2022 alone. Much of this money came through private equity funds, which are known for their efficiency in managing and deploying large sums.
Lagos is experiencing rapid urbanization and a significant housing shortage, driving demand for residential and commercial properties. Private equity funds are perfect for this scenario because they can quickly gather resources to finance large projects, crucial for meeting the housing needs of a growing city.
About 70% of real estate investments in Lagos are financed through private equity, highlighting its importance in the market. This is largely due to private equity's ability to pool resources and invest in large-scale projects, which are often necessary in rapidly expanding urban areas.
Private equity funds are particularly effective in Lagos because they can swiftly mobilize resources to address the city's housing deficit. This ability to act quickly is essential in a market where demand is high and the need for development is urgent.
Sources: Nairametrics, Estate Intel, Vines Realty
7) Properties within 1 km of major expressways in Lagos command up to 15% higher prices
Properties within 1 km of major expressways in Lagos can attract up to 15% higher prices.
Why? It's all about location. Being close to these expressways means better accessibility to economic hubs. This makes properties more appealing because they offer improved connectivity and easier access to amenities, which is a big draw for both buyers and renters.
In Lagos, real estate prices are heavily influenced by location, infrastructure, and demand. Properties near major expressways like the Lagos-Ibadan Expressway often see increased values due to higher rental income potential and better resale value. These areas are strategically positioned for growth, thanks to ongoing infrastructure development and bustling commercial activities.
Investing in properties near these expressways is a smart move. The potential for growth in these areas is significant, which naturally leads to higher property values. While the exact 15% increase isn't always spelled out, the trend is clear: properties in these strategic locations are in high demand.
So, if you're considering buying property in Lagos, keep an eye on those near major expressways. Their strategic location and economic advantages make them a wise investment choice.
Sources: Property List Hub, Own A Home, Private Property
8) Properties on Lagos mainland are typically 30-50% less expensive than those on the island
Buying property on the Lagos mainland is 30-50% cheaper than on the island.
In 2023, rental prices highlight this difference: Ikoyi flats on the island averaged ₦12,590,000 per year, while similar properties in Guzape District on the mainland were about ₦7,410,000 annually. This stark contrast makes the mainland a more budget-friendly option.
The mainland's affordability extends beyond rentals. It offers a range of budget-friendly housing options, which is a major draw for those looking to cut down on living expenses. Many people prioritize affordability when deciding where to settle.
Property prices also reflect this trend. In 2023 and 2024, Victoria Island's median property prices were notably higher than those in mainland areas like Ikeja. This reinforces the perception of the mainland as a more economical choice.
For potential buyers, the mainland's lower prices mean more opportunities to find a home that fits their budget. Choosing the mainland can lead to significant savings without compromising on quality of life.
Whether you're renting or buying, the mainland offers a compelling case for those seeking value for money. The cost difference is a key factor for many when considering where to invest in property.
Sources: Lagos Property Network, Rent Apartment Lagos
We made this infographic to show you how property prices in Nigeria compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
9) Construction costs in Lagos increased by 10% in 2024 due to inflation
In 2024, construction costs in Lagos rose by an average of 10% due to inflation.
Inflation in Nigeria saw a dramatic rise, jumping from 22.42% in May 2023 to 33.69% in April 2024. This surge made building materials more expensive, impacting the overall cost of construction. For instance, cement, a crucial component in building, saw its price increase by about 74.42% to 86.05% between May 2023 and May 2024. When such essential materials become pricier, the cost of construction projects naturally goes up.
Global trends also influenced these rising costs. Since 2020, the world has seen a 37.7% increase in building material costs, driven by labor shortages and supply chain delays. These global factors have trickled down to affect Lagos, making construction more expensive.
For anyone considering buying property in Lagos, it's crucial to understand these dynamics. The rising costs aren't just a local issue but part of a broader global trend. As construction costs climb, so do property prices, affecting potential buyers.
Understanding these factors can help you make informed decisions. Whether you're looking to invest or build, knowing the reasons behind the price hikes can guide your choices. Keep an eye on both local and global trends to navigate the market effectively.
Sources: Nairametrics, Buildertrend
10) Ikoyi is the priciest area in Lagos, with property prices averaging $1,200 per square meter
Ikoyi is the priciest neighborhood in Lagos, with property prices averaging $1,200 per square meter.
Its prime location and historical prestige make Ikoyi a top choice for those seeking luxury. Residents enjoy quick access to Lagos’s financial and business hubs, which is a major draw. The area is also close to high-end restaurants, embassies, and elite schools, adding to its allure.
Security is another key factor. Ikoyi offers high-level security, making it attractive to wealthy Nigerians, expats, and multinational corporations. This sense of safety enhances its exclusivity and appeal.
Land scarcity in Ikoyi contributes to its high property prices. With limited space, many residential options are vertical apartment buildings. This scarcity of land drives up property values, as demand continues to outpace supply.
Ikoyi's reputation as an upscale area is well-deserved. The combination of location, security, and limited land availability makes it a unique and desirable place to live. Its exclusivity is unmatched in Lagos.
For those considering a property investment in Lagos, Ikoyi stands out as a prime option. The neighborhood's blend of convenience, security, and prestige ensures it remains a top choice for discerning buyers. Investing here means joining a community of affluence.
Sources: Getting to know Lagos – IKOYI: Suburb of Affluence and Wealth, Houses for sale in Ikoyi, Lagos, What Makes Banana Island So Expensive?
11) Over 80% of Lagos property developers face delays from infrastructure challenges
In Lagos, over 80% of property developers face delays due to infrastructure challenges.
These challenges include poor road networks, which make transporting materials and workers to construction sites both time-consuming and costly. Imagine trying to move heavy equipment through roads that are full of potholes or constantly congested. This not only slows down the pace of construction but also increases expenses, which can eventually trickle down to the buyer.
Another major issue is unreliable electricity. When the power supply is inconsistent, construction activities are frequently interrupted. This means projects take longer to complete, and developers end up spending more money to keep things moving. These additional costs often lead to higher prices for future homeowners, making it harder for people to afford new homes.
Water systems are also a concern. Inadequate water supply can halt construction activities, as water is essential for many building processes. Without a reliable water source, developers face further delays, adding to the already mounting costs.
Beyond infrastructure, developers must navigate bureaucratic and regulatory hurdles. The approval processes can be slow and complicated, causing even more delays. This red tape makes it challenging for developers to deliver affordable housing, as every delay adds to the overall cost of the project.
Sources: Housing TV Africa, Nigeria Housing Market
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12) Over 50% of Lagos real estate agents use social media to attract buyers
In Lagos, more than 50% of real estate agents use social media to attract buyers.
Social media has become a game-changer for real estate in Lagos, Nigeria. By 2023, nearly all estate practitioners in the city were leveraging platforms like Facebook, Instagram, and WhatsApp to boost their business. This trend didn't just stop there; it continued to grow into 2024, making these platforms a staple in the industry.
Why the shift? It's simple. Social media offers a convenient and cost-effective way to reach a massive audience. Real estate firms in Nigeria have found these platforms essential for advertising properties and engaging with potential clients. The visual appeal and direct interaction with buyers have made social media an indispensable part of their marketing strategy.
Moreover, social media isn't just about visibility; it's about results. Agents have found it to be the most effective technique for generating high-quality leads, even more so than traditional methods like multiple listing services. By creating engaging content and sharing property listings, agents can attract and interact with potential buyers more efficiently.
In a city as dynamic as Lagos, the ability to showcase properties visually and interact with buyers directly is crucial. Social media platforms provide the perfect avenue for this, allowing agents to engage with a broader audience and make connections that were previously unimaginable.
Sources: Open Books UCT, The MLS Properties, Naija Houses
13) Lagos makes up over 30% of Nigeria's residential real estate transactions
Lagos handles over 30% of Nigeria's residential real estate transactions because it's the country's economic powerhouse.
As the 4th largest economy in Africa, Lagos is on track to surpass Johannesburg by 2035. This bustling city has seen a 50% surge in property sales from 2021 to 2023, fueled by a growing demand for homes and a boost in local purchasing power. With a population exceeding 20 million, Lagos is a magnet for those seeking both residential and commercial spaces.
Foreign investors are also drawn to Lagos, with the city capturing 54% of Nigeria's total Foreign Direct Investment in 2020, especially in real estate. This influx of investment is a testament to Lagos's appeal on the global stage. The city's ambitious infrastructure projects, like new roads and bridges, are making it even more attractive by enhancing property values and accessibility.
These developments are not just about convenience; they are reshaping the landscape of Lagos, making it a prime spot for real estate. The city's strategic initiatives are designed to support its growing population, which is expected to reach over 14 million by 2025, ensuring a steady demand for housing.
For anyone considering a property investment, Lagos offers a dynamic market with promising returns. The city's economic growth and infrastructure improvements are key drivers of its real estate boom. With its vibrant economy and strategic location, Lagos is a top choice for both local and international investors.
Sources: The Sun, Lagos Resilience Strategy, Belkalid
14) Around 65% of home buyers in Lagos prioritize reliable electricity access over other features
In Lagos, about 65% of home buyers now prioritize access to reliable electricity over other features when choosing a property.
This shift is largely due to the challenges and costs of securing a steady power supply, especially in upscale areas like Lekki. Homeowners are increasingly aware of how crucial reliable electricity is for daily life, as it directly impacts comfort and convenience.
According to Nairametrics, the constant need for negotiations and tariff reviews to maintain a 24/7 power supply highlights its importance. This necessity is a key factor in the decision-making process for many potential buyers.
Moreover, The MLS Properties points out that rising electricity costs have significantly impacted the real estate sector in Nigeria, including Lagos. These costs are a major concern for property developers, commercial property owners, and tenants alike.
For existing homeowners and potential buyers, electricity expenses are a significant consideration. The financial burden of high electricity costs can influence the overall affordability and attractiveness of a property.
In upscale neighborhoods, the ability to secure a reliable power supply can be a deciding factor, making it a top priority for many. This trend reflects a broader understanding that access to consistent electricity is essential for a comfortable lifestyle.
Sources: Nairametrics, The MLS Properties
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Nigeria. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
15) At least 35% of real estate investors in Lagos favor off-plan purchases
In Lagos, off-plan properties have surged in popularity among real estate investors in 2023 and 2024.
Investors are drawn to these properties because of flexible payment plans and the potential for high rental income. According to CW Real Estate, these factors make off-plan investments particularly attractive. The ability to customize properties before completion also adds to their appeal, allowing buyers to tailor their future homes or rental properties to their specific needs.
In areas like Lekki and Ikoyi, there's a noticeable trend: premium properties are in high demand. This demand is largely fueled by high-net-worth individuals and corporate clients who see the value in off-plan investments. These areas are known for their upscale living conditions and proximity to business hubs, making them ideal for those looking to invest in luxury real estate.
One of the key advantages of off-plan properties is the lower initial cost. This makes it easier for investors to enter the market without needing a large upfront capital. Over time, as the property is developed, its value tends to increase, offering a promising return on investment.
Moreover, the potential for high resale value is another significant draw. Investors are not just looking at the immediate benefits but also considering the long-term gains. As the property market in Lagos continues to grow, the resale potential of these properties becomes even more enticing.
At least 35% of real estate investors in Lagos prefer off-plan purchases, a trend supported by the growing interest in these flexible and potentially lucrative investments.
Sources: CW Real Estate, Property Lagos, Dennis Isong
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.