Is Nigerian property market crashing or growing?

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

Who is the author of this content?

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 The AfricanVestor, 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 have property prices changed in Lagos, Abuja, and Port Harcourt over the past 12 months?

Property prices across Nigeria's major cities have experienced dramatic increases over the past year, with some locations seeing the highest growth rates in decades.

Lagos leads the surge with property prices jumping 39.5% in 2024, particularly driven by luxury apartments and short-let properties. The city's prime residential areas and emerging suburbs both contributed to this exceptional growth, with areas like Ikoyi, Victoria Island, and Lekki seeing the most significant appreciation.

Port Harcourt has recorded even more dramatic increases, with home prices climbing over 70% year-on-year. This growth stems from increased demand from multinational companies operating in the oil and gas sector, combined with rising interest from the expanding middle class seeking quality housing options.

Abuja's residential market shows more moderate but still substantial growth, with prices rising approximately 26-30% year-on-year. The capital continues to attract young professionals, government workers, and diaspora buyers looking for stable investment opportunities in a politically secure environment.

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

What are the current rental yields for residential and commercial properties in major Nigerian cities?

Nigerian rental yields remain attractive compared to many global markets, offering investors solid returns despite rising property prices.

Lagos residential properties generate average rental yields between 6-10%, with significant variation based on location and property type. Prime areas like Ikoyi and Victoria Island typically yield 4.5-6%, while emerging suburbs can reach up to 10% gross returns. Short-let apartments in strategic locations can achieve even higher yields through platforms targeting business travelers and tourists.

Abuja offers consistent gross yields of 6-8% for most residential properties, making it an attractive option for investors seeking stable rental income. The city's large government workforce and growing expatriate community provide steady tenant demand across various price segments.

Port Harcourt presents exceptional opportunities for short-let investments, with some properties achieving up to 18% annualized returns. However, traditional long-term rentals in the city average around 7-9%, which remains competitive given the city's economic fundamentals.

Commercial properties across major cities typically produce 8-10% yields, though performance varies significantly based on location, tenant quality, and lease terms.

How many new housing units are being completed each quarter, and is supply keeping up with demand?

Nigeria's housing supply is increasing substantially, but demand continues to outpace new completions across urban centers.

Lagos State has committed to delivering over 14,000 new housing units by early 2026, building on the approximately 10,000 units completed since 2019. The state government has thousands more units currently under construction through various public-private partnerships and direct development programs.

Despite these impressive completion numbers, Nigeria still faces a massive housing deficit estimated at 20-22 million units nationwide. Urban migration and population growth mean that even substantial new supply additions struggle to keep pace with rising demand, particularly in major cities.

Construction activity remains robust, with Lagos alone issuing over 37,000 building permits in the past six years. This strong pipeline indicates continued supply growth, though absorption rates in key markets suggest demand remains healthy.

The supply-demand imbalance particularly affects affordable housing segments, where government initiatives are working to accelerate delivery through modular construction and streamlined approval processes.

Are mortgage interest rates rising or falling, and how affordable are loans for average buyers right now?

Nigerian mortgage rates remain at historically high levels, severely limiting affordability for most potential homebuyers.

Rate Type	Current Level	Affordability Impact
Central Bank Lending Rate	27.5% (peaked in 2024)	Extremely High
Average Mortgage Rates	18-20%	Very Limited Access
Commercial Bank Rates	15-25% range	Prohibitive for Most
Government Housing Loans	6-9% (limited availability)	More Accessible
Diaspora Financing	12-15%	Moderately Accessible

The Central Bank of Nigeria has maintained high policy rates to combat inflation, which peaked at 34% in 2024 before easing to approximately 23% by mid-2025. While rates have stabilized, they remain far above levels that would make mortgages accessible to average Nigerian earners.

Most property purchases continue to rely on cash transactions or alternative financing arrangements, limiting market participation to higher-income buyers and investors with significant capital resources.

What are foreign investors doing—are they entering, holding, or exiting the Nigerian property market?

Foreign investors, particularly Nigerian diaspora, are actively entering and holding positions in the Nigerian property market, viewing real estate as an inflation hedge and stable investment.

Diaspora investment flows have intensified significantly, with investors seeking to capitalize on naira depreciation by purchasing properties at relatively attractive USD-equivalent prices. These investors typically focus on residential properties in prime Lagos locations, Abuja government districts, and emerging commercial developments.

International institutional investors are gradually increasing their exposure, though regulatory complexities and currency volatility continue to present challenges. Recent improvements in digital property registration systems, particularly Lagos e-GIS, have enhanced transparency and investor confidence.

Foreign capital is particularly drawn to luxury residential developments, commercial real estate with stable tenant profiles, and mixed-use projects in strategic locations. The combination of high local yields and potential currency appreciation upside makes Nigerian real estate attractive despite macroeconomic uncertainties.

Regulatory reforms and government initiatives supporting foreign investment have contributed to sustained international interest, though investors remain selective about locations and property types.

How has inflation and the naira exchange rate impacted property values in both local and foreign currency terms?

Inflation and naira volatility have driven substantial property value increases in local currency terms, while USD-denominated values fluctuate with exchange rate movements.

Nigeria's inflation rate peaked at 34% in 2024 before moderating to approximately 23% by mid-2025, directly impacting construction costs and property values. Material costs and labor expenses have roughly doubled, with developers passing these increases to buyers and renters through higher prices.

The naira's depreciation against major currencies has created complex valuation dynamics. Properties that appreciated 30-40% in naira terms may show more modest gains or even losses when measured in USD, depending on the specific timing of exchange rate movements.

Construction material imports, which constitute a significant portion of development costs, have become substantially more expensive due to currency weakness. This cost inflation has become a permanent feature embedded in new property pricing across all market segments.

For foreign investors, naira depreciation has created opportunities to acquire properties at relatively attractive USD-equivalent prices, while local investors seek real estate as protection against currency debasement and inflation.

What's happening with land sales volumes across urban, peri-urban, and rural areas?

Land sales remain robust across urban and peri-urban areas, with emerging zones around major cities experiencing exceptional price appreciation.

Urban land sales continue at strong volumes, particularly in Lagos where established areas maintain high transaction activity despite elevated prices. Prime commercial and residential plots in Victoria Island, Ikoyi, and Lekki command premium pricing with consistent buyer interest.

Peri-urban areas are experiencing the most dramatic growth, with locations like Ibeju-Lekki seeing land prices appreciate up to 60% in 2024. These emerging corridors benefit from infrastructure development, government planning initiatives, and buyer migration from more expensive central locations.

Rural land markets face different pressures, with agricultural land experiencing reduced demand due to security concerns and urbanization trends. However, rural areas near major cities are seeing increased interest for large-scale residential and commercial development projects.

Government land allocation and titling processes continue to influence sales volumes, with improved digital systems in Lagos and other states facilitating more transparent and efficient transactions.

How high are vacancy rates in office, retail, and residential buildings in Lagos and Abuja?

Vacancy rates show mixed trends across property types, with Grade A office spaces showing improvement while some retail and older commercial properties face persistent challenges.

Grade A office occupancy in Lagos rose to 73% in H1 2025, up from 65% previously, indicating strong demand for quality commercial space. However, average rents for premium Ikoyi offices declined by 3.5% year-on-year, suggesting competitive pressure despite improving occupancy.

Retail vacancy rates in major urban corridors average approximately 10%, with significant variation based on location and property quality. Older shopping centers and less strategic retail locations face higher vacancy challenges, while modern developments in prime areas maintain stronger occupancy.

Residential vacancy rates remain relatively low in desirable locations, particularly for affordable rental units. High absorption rates for well-located residential properties reflect continued strong tenant demand across most market segments.

Some older office and retail properties are being converted to residential or mixed-use developments to address changing market demands and reduce vacancy challenges.

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.

Are property developers slowing down projects, or are new construction permits still being issued actively?

Property developers remain active with robust construction activity, supported by strong government permit issuance and continued market demand.

Lagos State has issued over 37,000 building permits in six years, demonstrating sustained construction activity across residential and commercial sectors. The permit pipeline includes substantial new residential developments, commercial projects, and mixed-use complexes throughout the state.

Government initiatives supporting housing development, including streamlined approval processes and public-private partnerships, are keeping developers engaged despite challenging economic conditions. Policy frameworks continue to evolve to support efficient project delivery and reduce regulatory barriers.

Construction costs have increased significantly due to material inflation and currency depreciation, but strong demand and limited supply keep development financially viable for well-located projects. Developers are adapting through value engineering, alternative materials, and modular construction techniques.

The development pipeline remains busy in key cities, with government incentives and infrastructure improvements supporting continued construction activity across various property types and price segments.

How are government policies affecting the market through taxes, housing initiatives, or land reforms?

Government policies are actively supporting market growth through comprehensive housing initiatives, land reforms, and tax structures designed to encourage development.

Key policy initiatives include the Renewed Hope Cities program, which aims to deliver affordable housing through modular construction and streamlined development processes. These programs target Nigeria's massive housing deficit while creating opportunities for private sector participation.

Land reform efforts focus on improving titling processes, digitizing property records, and reducing transaction costs. Lagos e-GIS and similar systems in other states are enhancing transparency and making property transactions more efficient for both domestic and foreign investors.

Tax policies generally support property development, with various incentives available for affordable housing projects and infrastructure development. Property taxes remain relatively low compared to international standards, though implementation and collection efficiency varies by location.

Government infrastructure investments, including road networks, power supply improvements, and public transportation projects, directly support property values and development opportunities in target areas.

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

What do recent reports from major Nigerian real estate agencies and consultancies say about short-term outlook?

Market reports from leading agencies and consultancies maintain bullish outlooks for Nigerian real estate, expecting continued price and rent growth despite macroeconomic challenges.

Industry analysts consistently project continued appreciation in Lagos and Abuja property markets, driven by fundamental supply-demand imbalances and sustained investment flows. Most forecasts anticipate price growth will moderate from current exceptional levels but remain positive.

PropTech developments, improved digital infrastructure, and enhanced transparency are cited as key drivers supporting market resilience and investor confidence. These technological improvements are reducing transaction costs and improving market efficiency.

Consultant reports emphasize infrastructure development, diaspora investment flows, and government housing initiatives as primary growth catalysts. However, analysts also note that inflation, currency volatility, and construction cost pressures will continue to influence market dynamics.

The consensus view supports continued investment in strategic locations and property types, while acknowledging the importance of careful market analysis and risk management given macroeconomic uncertainties.

Are distressed sales increasing compared to last year, and what does this mean for buyers?

Distressed property sales and auctions are increasing, primarily driven by economic volatility and loan defaults, but demand for discounted assets remains strong in key cities.

The rise in distressed sales includes foreclosures, abandoned development projects, and urgent owner-initiated sales below market value. Economic pressures, high interest rates, and business challenges have contributed to increased distressed asset availability.

Despite the increase in distressed sales, demand for well-located discounted properties remains robust, particularly in Lagos and Abuja. Investors with available capital are actively seeking these opportunities as entry points into prime markets.

Banks and financial institutions are managing increased non-performing loan portfolios, leading to more structured asset disposal processes. This creates opportunities for qualified buyers to acquire properties at significant discounts to current market values.

For potential buyers, distressed sales present opportunities to enter the market at attractive prices, though due diligence becomes even more critical given the complex circumstances typically surrounding these transactions.

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. Real Estate Market Trends in Nigeria
2. Lagos Ogun Top Residential Property Price Increases
3. Average Rental Yield Nigeria
4. Lagos State Government Housing Plan
5. Nigeria Lending Rate Trend
6. Foreign Investment Impact on Nigeria Real Estate
7. Inflation and Exchange Rates Effect on Real Estate
8. Grade A Offices Occupancy Rate
9. Lagos Building Permits Statistics
10. Distressed Property Auctions