Is naira devaluation affecting property prices badly?

Authored by the expert who managed and guided the team behind the Nigeria Property Pack

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THE AFRICANVESTOR

A team specialized in real estate investing in African countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Nigeria. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At TheAfricanVestor, we explore the Nigerian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Lagos, Abuja, and Port Harcourt. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

How much has the naira lost in value against the dollar over the past 12 months?

The naira has experienced a devastating decline against the US dollar over the past year.

As of September 2025, the naira has lost approximately 40% of its value against the dollar compared to mid-2024. The exchange rate has reached between ₦1,500 and ₦1,720 per dollar, representing one of the most significant currency devaluations in Nigeria's recent history.

This dramatic weakening stems from currency reforms implemented by the government and persistent inflationary pressures throughout the economy. The devaluation peaked in late 2024 and continues to exert downward pressure on domestic purchasing power and asset valuations across Nigeria.

The currency crisis has fundamentally altered the economic landscape for property buyers, investors, and developers operating in Nigeria's residential market.

What is the current average price per square meter for residential property in Lagos and Abuja compared to last year?

Property prices in Nigeria's major cities have responded dramatically to the naira's weakness, but with varying impacts across different market segments.

City/Area	2025 Average Price/m²	2024 Estimate	Percentage Change
Lagos (Prime Areas - Ikoyi)	₦3,273,000/m²	₦3,700,000/m²	-10% to flat
Lagos (Non-Prime Areas)	₦200,000-1,000,000/m²	₦180,000-900,000/m²	+20-30%
Abuja (Central/Prime)	₦1,800,000/m²	₦1,300,000-1,800,000/m²	+10-39%
Abuja (Emerging Areas)	₦200,000-1,000,000/m²	₦180,000-900,000/m²	+10-30%
Other Major Cities	₦150,000-800,000/m²	₦140,000-700,000/m²	+5-15%

It's something we develop in our Nigeria property pack.

How have property sales volumes changed in the past 6 months in major cities like Lagos, Abuja, and Port Harcourt?

Property sales volumes across Nigeria's major cities have shown mixed trends, with overall transaction activity softening despite persistent demand in select segments.

In Lagos, top-tier areas like Ikoyi and Lekki have maintained relative resilience, but overall transaction volumes have declined as affordability has dropped significantly for middle-income buyers. Estate agents report fewer completed sales but note that demand for investment-grade and rental properties remains strong among those with sufficient capital.

Abuja's central districts including Maitama and Asokoro continue to see steady activity, particularly from government officials and high-net-worth individuals seeking to preserve wealth through real estate. However, the broader Abuja market has experienced a noticeable slowdown in sales volumes.

Port Harcourt and other secondary cities have faced sharper declines in transaction volumes, as the economic pressures from naira devaluation have hit these markets particularly hard. Many potential buyers in these areas have been priced out or are adopting a wait-and-see approach.

The overall trend shows fewer sales but persistent demand for properties that can serve as effective hedges against currency depreciation and inflation.

Are landlords increasing rents to keep up with the weaker naira, and by how much on average?

Landlords across Nigeria have implemented substantial rent increases that far exceed general inflation rates, directly responding to the naira's weakness.

Average rent increases range from 40% to 60% per year for urban apartments and homes, significantly outpacing both general inflation and salary growth. In Lagos, apartment rents now range from ₦1.6 million to ₦5 million per year in 2025, compared to ₦1.2 million to ₦2.5 million per year in 2024.

This represents an increase of 30% to 60% in many Lagos neighborhoods, with some premium areas seeing even steeper jumps. Abuja has experienced similar rent inflation, with many landlords justifying increases as necessary to maintain property values in real terms.

The rental market has become a significant source of economic stress for Nigerian families, with housing costs now consuming an even larger portion of household income. Many tenants are being forced to relocate to more affordable areas or seek shared accommodation arrangements.

These rent increases have created what many describe as a rental crisis, pushing affordability beyond the reach of a growing segment of Nigeria's urban population.

Have construction costs in Nigeria risen significantly due to imported materials being more expensive?

Construction costs across Nigeria have experienced dramatic increases directly tied to the naira's devaluation and higher import prices.

Construction costs have jumped 30% to 50% since last year due to the higher cost of imported materials including cement, steel, tiles, and finishing materials. Imported construction materials have increased by 25% to 45% in naira terms, making development projects significantly more expensive.

Cement prices now range from ₦620,000 to ₦720,000 per ton, compared to ₦480,000 to ₦550,000 per ton in 2023. Steel reinforcement bars, roofing materials, and imported tiles have all seen similar price increases, forcing developers to reassess project viability.

Many developers are responding by adopting more local materials where possible and exploring modular construction methods to control costs. Some are also pre-purchasing materials to lock in prices before further increases, though this requires significant upfront capital.

The construction cost inflation has led to project delays, reduced profit margins for developers, and higher final sale prices for new properties, further contributing to the overall affordability crisis in Nigeria's housing market.

Are foreign investors pulling back from the Nigerian property market because of the currency situation?

Foreign investors have dramatically reduced their exposure to Nigeria's property market in response to currency volatility and economic uncertainty.

The first half of 2025 saw an 85% increase in foreign equity outflows, with Nigeria recording a net negative portfolio balance. Foreign investors are pulling back sharply from Nigerian assets, including real estate, as they seek to avoid further currency-related losses.

However, some foreign investors continue targeting luxury and prime property segments, viewing the dollar-denominated pricing as offering discounted entry points. Diaspora Nigerians with dollar earnings represent a significant portion of remaining foreign demand, particularly for high-end residential properties.

Overall foreign investment sentiment remains cautious, with most international investors adopting a wait-and-see approach until currency stability improves. The broader macroeconomic environment has made Nigeria a higher-risk investment destination for foreign capital.

This pullback has created opportunities for domestic investors with naira liquidity to acquire properties at relatively attractive prices, particularly in segments previously dominated by foreign buyers.

Is there evidence that Nigerians are shifting money into real estate as a hedge against inflation and currency loss?

Nigerians are aggressively redirecting their savings and investments into real estate as protection against naira devaluation and inflation.

There is substantial evidence that Nigerians are shifting liquidity into property as a hedge against inflation and currency loss, especially in Lagos and Abuja. Real estate is increasingly viewed as one of the few reliable stores of value in the current economic environment.

Proptech platforms and fractional ownership schemes have enabled broader participation in real estate investment, allowing smaller investors to access property markets previously reserved for high-net-worth individuals. Many Nigerians are converting cash savings, business profits, and even foreign currency holdings into property assets.

This domestic demand has helped support property prices despite the economic challenges, with many buyers willing to pay premium prices to secure real assets. The trend reflects a fundamental shift in investment behavior as Nigerians seek to preserve wealth amid currency instability.

Financial advisors increasingly recommend real estate allocation as part of diversified portfolios designed to weather Nigeria's economic volatility.

What do estate agents in Lagos and Abuja report about buyer interest since the devaluation?

Estate agents across Lagos and Abuja report a fundamental shift in buyer behavior, with surging interest in real assets but lower conversion rates due to higher prices.

Estate agents consistently report surging buyer interest for real assets, but conversion rates are lower due to higher prices and reduced affordability. Most inquiries now focus on investment properties, rental units, and mid-market homes rather than luxury purchases.

Agents note that serious buyers are increasingly motivated by wealth preservation rather than lifestyle considerations. Many clients are asking specifically about properties that can generate rental income or appreciate faster than the naira's depreciation rate.

The sales process has become more complex, with buyers requiring additional time to secure financing or liquidate other assets to complete purchases. Cash transactions have become more common as buyers seek to avoid the complications of naira-denominated financing.

Despite the challenges, agents report that qualified buyers remain highly motivated, often willing to move quickly when suitable properties become available at reasonable prices.

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.

How have mortgage rates or lending conditions changed for property buyers since the currency weakened?

Mortgage rates and lending conditions in Nigeria remain challenging, with limited improvement despite new government programs.

Mortgage rates remain extremely high at 20% to 30% per annum for most borrowers, though new government programs offer 6% to 9.75% fixed rates for qualified applicants. These preferential programs typically require substantial down payments and strict income verification, limiting accessibility for most buyers.

Lending standards have tightened significantly, with banks requiring larger down payments and implementing more stringent risk evaluation procedures. Most mortgages require down payments of 30% to 50%, making homeownership even more challenging for middle-income families.

Some specialized programs target diaspora Nigerians and government employees, offering terms up to 30 years with more favorable interest rates. However, these programs have limited capacity and strict eligibility requirements.

The challenging lending environment has pushed many buyers toward cash purchases or alternative financing arrangements, further concentrating property ownership among high-net-worth individuals and investors.

Are luxury properties priced in dollars seeing different demand trends compared to mid-range or affordable homes?

The luxury and mid-range property segments are experiencing divergent demand patterns based on pricing currency and target buyer demographics.

Luxury properties priced in dollars are more attractive to foreign buyers and diaspora Nigerians, but face reduced demand from local buyers who have been priced out by currency depreciation. These properties offer relative value for dollar-earning buyers but represent increasingly expensive investments for naira-earning Nigerians.

Mid-range and affordable homes see comparatively higher and more sustained demand as local buyers shift away from volatile financial assets into real estate. These properties serve as accessible entry points for Nigerians seeking to preserve wealth through property ownership.

The bifurcation has created distinct market dynamics, with luxury properties experiencing longer sales cycles but potentially stronger price appreciation in dollar terms, while mid-range properties face intense competition among local buyers.

Developers are increasingly focusing on mid-market projects that cater to domestic demand rather than luxury developments that rely heavily on foreign buyers or high-net-worth Nigerians.

It's something we develop in our Nigeria property pack.

What impact is the devaluation having on land prices in rapidly developing areas outside city centers?

Land prices in peripheral and rapidly developing areas are experiencing moderate increases as buyers seek more affordable alternatives to expensive city center locations.

Land prices outside city centers are rising moderately as buyers are priced out of central locations due to currency-related affordability pressures. Development corridors and satellite towns around Lagos and Abuja are seeing sharper appreciation and increased transaction activity.

Areas like Ibeju-Lekki, Epe, and other emerging Lagos corridors are attracting buyers seeking land investments that offer development potential at lower entry costs. Similarly, satellite towns around Abuja are experiencing increased interest from buyers looking for affordable alternatives.

The trend represents a geographic shift in demand as the economic pressures created by naira devaluation push buyers toward previously less desirable locations. This has created new investment opportunities in areas with strong development potential.

Infrastructure development in these peripheral areas is becoming increasingly important for their long-term value proposition, with buyers paying particular attention to planned road networks, utilities, and transportation links.

Have property developers slowed down or delayed new projects because of higher costs and weaker demand?

Property developers across Nigeria have significantly adjusted their project timelines and strategies in response to higher costs and changed market conditions.

Many property developers have slowed or delayed projects due to inflated costs and weaker demand, with off-plan sales facing deadline extensions throughout 2025. The industry consensus points toward slower delivery schedules and fewer new project launches as developers adapt to the challenging environment.

Some developers are responding by pre-purchasing materials to lock in costs before further price increases, though this requires substantial upfront capital that many smaller developers cannot access. Others are shifting toward modular construction methods and increased use of local materials to control expenses.

The development sector is experiencing consolidation, with well-capitalized developers gaining market share while smaller players struggle with financing and cost pressures. Many developers are focusing on completing existing projects rather than launching new ones.

Despite the challenges, some developers continue to move forward with projects targeted at the growing domestic market for mid-range housing, viewing the current period as an opportunity to gain market share while competitors pause operations.

It's something we develop in our Nigeria property pack.

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.

Sources

1. Trading Economics - Nigeria Currency
2. Wise - USD to NGN Rate History
3. TheAfricanVestor - Average House Price Nigeria
4. Properstar - Nigeria House Prices
5. TheAfricanVestor - Abuja Real Estate Market Trends
6. Nigeria Housing Market - Rental Crisis
7. Lands of Nigeria - Construction Cost Index 2025
8. Lagos Television - Foreign Investor Selloff
9. Gibraltar Properties - Naira Devaluation Impact
10. Nigeria Real Estate Blog - Mortgage Opportunities 2025