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
Why is Nigeria emerging as a prime destination for property investment in 2025? Is it the impressive rental yields, the rapidly growing urban population, or the affordability compared to other African markets? What are the key advantages for investors?
We get asked these questions all the time because we’re on the ground, working closely with developers, real estate agents, and investors like you. With so much interest in this market, we’ve decided to turn our individual answers into a comprehensive article for everyone to benefit from.
Our goal is to provide a clear case for investing in Nigeria's real estate market, backed by our firsthand experience and market knowledge.
If you think we missed an important point in our content or want to know more, don’t hesitate to reach out (we answer super fast). Your feedback makes our content even stronger.
Finally, please note that this is not financial or investment advice. Investing in real estate carries inherent risks, and market conditions can change unexpectedly. We strongly encourage you to conduct thorough research and consult with a qualified financial advisor before making any investment decisions.
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1) In Nigeria, you’ll enjoy a strong rental market with steady income potential
The rental market in Nigeria is thriving, offering a reliable income stream for property owners.
In bustling cities like Lagos and Abuja, there's a high demand for rental properties. Take Lagos, for instance, where short-term rentals have a median occupancy rate of 43%, with properties booked for about 157 nights a year at an average daily rate of $72. This clearly shows a strong appetite for rentals.
One reason for this demand is the rapid urbanization and population growth. Lagos is on track to exceed 20 million residents by 2025, which means more people are looking for places to live, driving up the need for rental properties.
The growing middle class in Nigeria is another factor. With more disposable income, this group is increasingly renting properties, which bolsters the rental market. In Lagos, rental yields are attractive, ranging from 6% to 8% annually, making it a competitive investment compared to other options.
Urbanization isn't just a buzzword; it's a reality in cities like Lagos and Abuja, fueling the rental market's expansion. The influx of people into these urban areas is a major driver of growth, as more individuals seek housing solutions.
For property investors, the combination of a rising middle class and urbanization presents a lucrative opportunity. The steady rental yields and high demand make Nigeria's rental market a promising venture.
Sources: Airbtics, The Africanvestor, NaijaHouses
2) With REITs, property investment in Nigeria is now more accessible
Real Estate Investment Trusts (REITs) are changing the game for property investment in Nigeria.
In 2023, the Nigerian Stock Exchange saw a boost in REIT listings, with three key players: UPDC REIT, SFS REIT, and UH REIT. This uptick signals a growing interest among everyday investors who now find it easier to dip their toes into real estate without buying property outright.
Retail investors are catching on, with SFS REIT, Nigeria's smallest, experiencing a 31.6% jump in share price in 2023. This rise shows that REITs are becoming a go-to option for those looking to invest in real estate without the hassle of direct ownership.
The Nigerian government is also playing a supportive role by implementing policies that require listed REITs to regularly share key performance metrics. This transparency builds trust and makes it simpler for people to invest confidently.
For those eyeing property investment, REITs offer a way to get involved without the traditional barriers. Investors can now participate in the real estate market with less capital and reduced risk, thanks to these trusts.
With REITs, you can enjoy the benefits of real estate investment, like rental income and property appreciation, without the headaches of property management. This shift is making real estate investment more democratic, opening doors for a wider range of investors.
Sources: Nairametrics, Estate Intel, Standard Bank
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.
3) Lagos's growing tech hubs are drawing professionals, increasing demand for housing
The rise of tech hubs in cities like Lagos is attracting professionals who need housing.
Lagos is buzzing with over 2,000 tech startups, making it a hotspot for innovation. Big names like Flutterwave and Opay are leading the charge in fintech. In 2023, Flutterwave made headlines by raising $35 million in funding, drawing even more professionals to the city.
Foreign investments are pouring into Nigeria's tech scene, boosting the economy and creating jobs. Thanks to pro-market reforms, capital importation hit USD 1.1 billion in late 2023. This influx is attracting skilled professionals to Lagos, eager to tap into new opportunities.
Housing demand is soaring in tech-centric areas like Yaba, once dubbed Nigeria’s Silicon Valley. Real estate prices are climbing, but initiatives like Talent City are stepping in with competitive pricing to lure tech talent. This makes relocating to Lagos more appealing for those in the industry.
Despite infrastructure challenges, tech professionals are flocking to Lagos for its vibrant job market. The city’s dynamic environment and supportive ecosystem are turning heads globally. The Lagos State Government is investing in startups and refining regulations, creating a favorable business climate that professionals find irresistible.
Sources: Tech Life with Ugo, PSMGT, TechCrunch, Wazo Plus
4) With Nigeria's middle class expanding, there's a rising demand for quality housing
Nigeria's growing middle class is driving up the demand for quality housing.
With the middle class now making up about 23% of the population, according to the African Development Bank, more Nigerians are aspiring to better living conditions. This shift is not just about numbers; it's about people wanting homes that reflect their improved economic status.
Urban areas are expanding fast, with a growth rate of 3.5121% in 2023. By 2050, the urban population is expected to surpass 200 million, which means more housing developments are needed to cater to this surge. As the economy recovers, with GDP growth projected at 3.5% by the end of 2024, people will have more disposable income to spend on housing that meets their expectations.
The Federal Government is stepping in with initiatives like the release of N126.5 billion for 100,000 houses, making mortgages and home financing more accessible. This is a game-changer for middle-income earners who are now finding it easier to buy quality homes.
Real estate market reports are buzzing with news of increased demand for both residential and commercial properties. This is largely due to urbanization and a middle class that is eager for improved living standards. The market is responding with developments that cater to these needs.
Sources: Dataphyte, Trading Economics, Nairametrics, Novatia Consulting
5) With Nigeria's population set to double by 2050, you can expect strong housing demand long-term
Nigeria's population is set to double by 2050, reaching a staggering 400 million people.
This boom is fueled by a high fertility rate of 4.62 children per woman as of 2022, making it one of the highest globally. Families are growing rapidly, and this trend is a key contributor to the population surge.
Adding to this is Nigeria's youthful demographic. With 63% of the population under 25, a wave of young people will soon start families, further boosting birth rates. This youthful energy is a major force behind the expected growth.
Urbanization is another significant factor. By 2050, 66% of Nigerians are expected to live in urban areas, a jump from about half in 2019. This shift means more people will need homes in cities, driving up housing demand.
For potential property buyers, this means a long-term demand for housing is almost guaranteed. As cities expand, opportunities for investment in urban real estate will likely grow.
Understanding these dynamics can help you make informed decisions about property investments in Nigeria. The combination of a young population and urban growth creates a promising landscape for real estate.
Sources: UNFPA, Wikipedia, ISS Africa
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6) With the hospitality industry booming, short-term rental properties are in high demand
The hospitality industry in Nigeria is booming, with a noticeable rise in short-term rental demand.
In 2023, Nigeria saw a surge in tourism, welcoming 1.2 million international visitors and experiencing a 20% increase in domestic tourism. This uptick in travel highlights Nigeria's growing appeal as a destination. With more people exploring the country, the need for accommodations, especially short-term rentals, is on the rise.
Hotels and short-term rentals are seeing high occupancy rates, a sign of the tourism industry's recovery post-COVID-19. Digital platforms have been pivotal in this resurgence, making it easier for travelers to find and book places to stay. As more tourists flock to Nigeria, the demand for these accommodations continues to grow.
The Nigerian government is also playing a key role in this growth by promoting tourism and hospitality. Events like the AKWAABA African Travel and Tourism Market are putting Nigeria on the map as a top global destination. These initiatives not only aim to boost foreign exchange but also to create jobs, further driving the hospitality sector's expansion.
For those considering investing in property, this trend presents a lucrative opportunity. The increasing number of visitors means a higher demand for short-term rentals, making it an attractive option for potential buyers. With the government's support and the tourism industry's recovery, the hospitality market in Nigeria is poised for continued growth.
Investing in short-term rental properties could be a smart move, given the current market dynamics. As Nigeria continues to attract more tourists, the demand for these types of accommodations is expected to rise, offering promising returns for property investors.
Sources: Business Day, Tourism Economics, Enso Connect
7) Nigeria's push for economic diversification is opening up new real estate opportunities
Nigeria's economic diversification is opening up new real estate opportunities, especially since 2023.
Foreign direct investment in non-oil sectors has been a game-changer, hitting a 4-year high of $3.4 billion in early 2024. This boost is thanks to improved investor confidence and government reforms, which are paving the way for fresh real estate ventures. The government's focus on industrialization and agriculture is also crucial. The Renewed Hope Infrastructure Development Fund is a standout initiative, aiming to develop infrastructure in key areas like agriculture, transportation, and energy.
This fund is not just about infrastructure; it's about growth. It's expected to create jobs and drive technological innovation, which in turn fuels the demand for real estate. The manufacturing sector is expanding, and new transportation networks are popping up, further enhancing real estate prospects. As the fund pours money into energy and manufacturing projects, the need for commercial and industrial real estate is growing.
Transportation improvements are a big deal too. Better connectivity makes properties more valuable and accessible. Imagine being able to easily reach new industrial hubs or agricultural zones; it changes the game for real estate investors. The government's efforts are not just about building roads or factories; they're about creating a more connected and efficient Nigeria.
For those looking to invest, these developments mean more than just numbers on a page. They represent real opportunities to tap into a growing market. Whether it's commercial spaces in bustling new industrial areas or residential properties in well-connected regions, the potential is vast. The landscape is changing, and with it, the possibilities for real estate investment are expanding.
Sources: Afreximbank, YouTube, NES Group
8) With rapid urbanization, more people are looking for homes
Urbanization in Nigeria is on a fast track, with urban areas now making up over half of the population.
People are flocking to cities like Lagos in search of better jobs and living conditions. Rural areas just can't compete with the job opportunities and infrastructure that cities offer, making urban migration a no-brainer for many.
In bustling Lagos, the housing demand is through the roof. With 23 million people and an average household size of 4.9, the city needs millions of homes. But there's a catch—Lagos is short by about 3.2 million units, putting a serious squeeze on the housing market.
Even with new developments popping up, Lagos can't seem to catch up with its housing needs. This shortage has driven up property prices, making urban real estate a hot commodity. Developers are pouring in investments, trying to meet the skyrocketing demand for homes.
As more people move to cities, the pressure on housing continues to mount. The real estate sector is buzzing with activity, as investors see the potential in Nigeria's urban growth. The housing deficit is a major challenge, but also an opportunity for those looking to invest in property.
Urbanization is reshaping Nigeria, with cities expanding rapidly to accommodate the influx of new residents. The demand for residential properties is a clear sign of this trend, as more people seek the benefits of city life. Urban growth is driving the real estate market, making it a dynamic and evolving landscape.
Sources: Trading Economics, Vaccines Immuno Journal, BuyLetLive Blog, World Bank Document, Trading Economics
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.
9) In Nigeria, you can benefit from tax incentives as a real estate investor
In Nigeria, real estate investors enjoy several tax incentives that make the market attractive.
One of the standout benefits is the Pioneer Status Incentive, which offers a tax holiday for three to five years to companies involved in real estate development. This means these companies can operate without paying income tax for a certain period, making it financially appealing to dive into real estate projects. Imagine starting a project and not worrying about income tax for a few years—it's a big deal!
The Nigerian Investment Promotion Commission is key in this process, granting certificates to qualifying industries, including real estate. This shows the government's commitment to boosting the sector. Such support is vital as it helps stimulate economic growth and attract both local and foreign investments. It's like the government is rolling out the red carpet for investors.
The real estate market in Nigeria is on the rise, with a projected growth of 7.10% from 2024 to 2029. This growth is partly due to the favorable tax conditions that make it enticing for investors to put their money into real estate. For instance, Edimara Properties Limited benefited from the Pioneer Status Incentive, showing how these tax breaks can lead to successful projects.
Investors are not just looking at numbers; they're seeing real opportunities. The tax incentives are like a magnet, drawing in those who want to capitalize on Nigeria's growing real estate market. It's a win-win situation for both the investors and the country's economy.
So, if you're considering buying property in Nigeria, these tax incentives could be a game-changer. They not only reduce the financial burden but also open doors to lucrative opportunities in a booming market.
Sources: Omaplex, Estate Intel, Statista
10) Cultural festivals and events make it easy to rent out your property short-term in certain regions
Cultural festivals are giving a big boost to short-term rentals in Nigeria.
Take the Calabar Carnival, known as "Africa's Biggest Street Party." Since it kicked off in 2004, attendance has been climbing steadily. This December-long festival pulls in millions of visitors, both local and international, making it a major tourist magnet. During this time, property owners in Calabar see higher occupancy rates as tourists flock to the area for a taste of local culture.
But it's not just Calabar. The Osun-Osogbo Festival is another event that draws crowds from around the world, further fueling the short-term rental market. These festivals are more than just fun; they are a driving force behind tourism in Nigeria, bringing in more tourists and boosting local economies.
Platforms like Airbtics show that in Lagos, short-term rental listings see a significant spike in occupancy during peak festival seasons. This trend highlights how cultural events are reshaping the rental landscape, offering property owners a chance to capitalize on the influx of visitors.
Tourist arrivals during these festivals are on the rise, and this uptick is closely linked to a boom in tourism-related activities. It's clear that cultural festivals are not just about celebration; they are a key factor in driving tourism in Nigeria.
Sources: Airbtics, Global Journals, Statista
11) The government's affordable housing schemes offer lucrative opportunities for investors
The Nigerian government is actively promoting affordable housing schemes, which can be lucrative for investors.
In 2023 and 2024, the government allocated significant funds for housing initiatives, and starting in 2025, they plan to increase the annual housing budget to a minimum of N500 billion. This shows a strong commitment to addressing the housing deficit and provides a stable environment for investment.
Public-private partnerships (PPPs) are playing a big role in tackling Nigeria's housing shortage. For instance, the Shelter Afrique agreement aims to deliver 5,000 affordable housing units, and the Karsana Renewed Hope City project has already raised substantial financing. These collaborations offer investors opportunities to participate in large-scale projects with government backing.
The demand for affordable housing is soaring, with Nigeria's housing deficit estimated at 28 million units, increasing at a rate of 20% annually. This high demand creates a lucrative market for investors who can provide affordable housing solutions. Government incentives for developers, such as the National Social Housing Fund, aim to generate substantial funds to support housing projects, making it attractive for investors to engage in these initiatives.
Successful case studies of affordable housing projects further highlight the potential for investment. Programs like the Renewed Hope Cities and Renewed Hope Estates focus on providing affordable options for low- and middle-income groups, demonstrating the viability and public interest in such projects. The Renewed Hope Online Housing Delivery Portal, with its strong user engagement, reflects this interest and potential market for investors.
Sources: VON, Housing TV Africa, Punch
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12) With more schools opening, there’s a growing need for student housing
The number of universities in Nigeria has reached 273 by 2024, reflecting a remarkable growth in educational institutions.
This boom is largely due to government policies encouraging more students to enroll in higher education. As a result, the student population has exploded, with about 2.2 million students now attending universities across the country.
With this surge in student numbers, the demand for student housing has skyrocketed. Major university towns are experiencing a significant shortage of accommodation, making it a prime opportunity for real estate investors.
Developers are keenly aware of this need and are actively investing in student housing projects. Rental prices near universities have climbed, so providing affordable housing options is becoming increasingly important.
Interestingly, many students are opting for off-campus living, which is further fueling the demand for new housing developments. This trend is reshaping the real estate landscape in university towns.
For those considering property investment in Nigeria, the student housing market presents a lucrative opportunity due to the ongoing expansion of educational institutions.
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.