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
Are you considering investing in Nigeria’s real estate market? What are the legal steps, tax implications, and cultural differences you need to understand before taking the plunge? What challenges do foreign investors typically face, and how can you overcome them?
These are the questions we hear most often from foreign investors because we’re actively connected to this market. We’ve spent time working with local agents, developers, and investors, so we know what works—and what doesn’t. That’s why we’ve written this article: to provide a clear guide that answers the questions we get asked daily.
Our goal is to help you, as a foreigner, to navigate the property buying process with confidence. If you think there’s something we missed or want more details, let us know (please do!). Your input helps us refine and improve our advice for everyone.
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1) Consider properties in emerging Lagos areas like Lekki or Ajah, as rapid infrastructure development is boosting property values
Investing in properties in emerging urban areas like Lekki or Ajah in Lagos is a smart move for maximizing profits.
In recent years, property prices in these areas have skyrocketed. For example, land prices in Lekki soared from N273,000 per square meter in 2021 to N516,000 per square meter by 2023. Ajah followed a similar trend, with land prices increasing from N22,964 per square meter in 2021 to over N48,000 per square meter by 2023. This dramatic rise is largely due to the rapid infrastructure development in these regions.
The Lagos State Government is heavily investing in infrastructure, which is a key driver of this property boom. In 2024, they allocated N550.689 billion to infrastructure projects, and in 2025, they earmarked a staggering 59% of the budget, amounting to N1.766 trillion, for capital expenditures. This focus on road construction and essential infrastructure is transforming these areas into prime real estate hotspots.
Lagos is also experiencing significant population growth, with an estimated 16.5 million people in 2024. This urbanization trend is expected to continue, further boosting property values. The development of new commercial centers and business hubs in Lekki and Ajah is attracting both local and international investors, making these areas highly desirable for real estate investment.
Major industries and business opportunities are flourishing in these regions, drawing in a diverse range of investors. The presence of these industries not only enhances the appeal of these areas but also contributes to the rising property values. This makes investing in Lekki and Ajah a lucrative opportunity for those looking to capitalize on the growing demand for real estate.
Sources: Nairametrics, Internet Geography, Northcourt Real Estate, Travel and Tour World, Internet Geography
2) Understand local regulations, as foreigners can’t own land in areas classified as "Federal Lands" in Nigeria
In Nigeria, foreigners face restrictions on owning land, especially in areas known as "Federal Lands."
The Nigerian Land Use Act of 1978 is a big deal here. It gives the state Governor control over all land, meaning land is primarily for Nigerian citizens. Foreigners can only get short-term leases, maxing out at 99 years.
While "Federal Lands" isn't a term you hear often in Nigeria, think of places used by the government or military. These are usually off-limits to foreign buyers. It's a bit like how the Bureau of Indian Affairs (BIA) manages land in the U.S., but Nigeria doesn't have an exact match. Military bases and government buildings are typically restricted.
Foreign investors often hit roadblocks because of these rules. Imagine trying to set up a factory but not being able to get a Certificate of Occupancy (C of O) because of unclear land titles or local pushback. The Nigerian Supreme Court has made it clear: foreigners can't own land outright under the Land Use Act, which leads to legal headaches.
These restrictions can lead to disputes and legal battles. For instance, a foreign company might want to build a manufacturing plant but can't get the necessary permits. This is because land titles are often murky and communities might resist.
So, if you're thinking about buying property in Nigeria, it's crucial to know these rules. Understanding local regulations can save you a lot of trouble down the line.
Sources: Counseal, AJOL, PM World Journal
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) Build relationships with locals in Nigeria, as informal networks and word-of-mouth are key to finding good property deals
In Nigeria, around 70% of property deals in recent years have been made through personal referrals.
Locals often rely on informal networks and word-of-mouth to find good property deals, so building relationships with local contacts can be beneficial. The formal land registration process can be quite complex, which nudges many transactions into the informal market. This makes personal connections crucial for navigating property purchases.
Even with the rise of technology, online property listings in Nigeria face significant challenges. Much of the data on land use and ownership is still paper-based, which limits the effectiveness of online platforms in certain areas. This means that while technology is advancing, it hasn't fully streamlined the property market yet.
For those looking to buy property, understanding the local landscape is key. The informal market thrives because of the cumbersome nature of formal processes, making it essential to tap into local knowledge and networks. This approach can often lead to better deals and smoother transactions.
In some regions, the reliance on personal connections is even more pronounced. Buyers and sellers often prefer to deal with people they know or who come recommended by trusted sources. This cultural aspect of the market is something newcomers should be aware of.
While technology is slowly making inroads, the traditional ways of doing business still hold strong. For now, the best strategy might be a blend of both worlds: using technology where possible but not neglecting the power of personal connections.
Sources: World Bank, Switchlanes Properties, Seso Global
4) Expect informal negotiations and potential fees from "omo onile" (landowners' representatives) during property transactions in Nigeria
Buying property in Nigeria often means dealing with "omo onile," or landowners' representatives, who can complicate the process.
In Lagos, over 60% of property transactions face issues with these representatives. They typically demand fees like development levies, foundation fees, and community fees, especially in areas such as Ibeju-Lekki. This is a common hurdle in the real estate market, and knowing about it can help you prepare.
These fees aren't just a minor inconvenience; they can significantly impact your budget. Real estate agents often talk about how these informal negotiations can add unexpected costs to land acquisition and development. It's almost like an unspoken rule in the property market here.
Legal disputes involving "omo onile" are not uncommon, and they can create major headaches for property owners. These disputes often revolve around land ownership or the fees themselves, making it crucial to have a clear understanding of the local dynamics before diving in.
Insider knowledge suggests that dealing with "omo onile" is almost inevitable, so it's wise to factor in these potential costs and challenges when planning your purchase. Some areas are more notorious than others, so doing your homework can save you a lot of trouble.
Real estate professionals often advise buyers to be prepared for these informal negotiations, as they are a significant part of the property buying process in Nigeria. Understanding the local customs and having a reliable agent can make a big difference.
Sources: BC Realty, Northcourt Real Estate, Estate Intel
5) Be ready for cash negotiations in Nigeria, as cash transactions are still common in the real estate market
In Nigeria, 26% of the population was unbanked in 2023, meaning many people still relied heavily on cash.
This reliance on cash is not just about access; there's a strong cultural preference for cash transactions. For example, cash usage at Point-of-Sale systems slightly increased from 74% in 2018 to 76% in 2023, showing that even with new technology, people feel more at ease with cash.
In rural areas, the trend is even more noticeable. Many real estate deals are conducted in cash, especially in the North, where banking facilities are scarce. This is largely due to trust issues with digital payments and a historical reliance on cash because of past economic instability.
When buying property in Nigeria, be prepared for negotiations that might involve cash payments. Cash transactions are still prevalent in the Nigerian real estate market, so it's not unusual to find sellers who prefer this method.
In these regions, financial exclusion is higher, and cash remains king. This is partly because of limited access to banking services and a deep-rooted trust in cash over digital systems.
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6) Avoid properties with unregistered titles or under government acquisition to prevent legal and financial troubles
When buying property, be wary of unregistered titles or government acquisition.
Back in 2023 and 2024, there were many stories about land ownership disputes due to unregistered titles. For example, a survey found that 71.4% of landlords in Nigeria didn't have formal titles, which led to big ownership conflicts.
Take the case of Mrs. Tope Adekunle in Lagos. She was evicted from her home by local thugs because it was sold to someone else. This highlights the risk of legal battles and financial losses when dealing with unregistered titles. Plus, land scams were rampant, with over 500,000 cases reported annually in Lagos and Ogun States.
The government is trying to fix these problems. They've teamed up with the World Bank to boost land titling through the National Land Titling Programme. The goal is to cut down on disputes and improve land formalization. But progress is slow, with only a small fraction of properties being regularized compared to the vast number without titles.
Sources: Business Day, The Guardian, Arise TV
7) Consider short-let apartments in Lagos and Abuja for investment, as tourism and business travel are boosting their profitability
You might be surprised to learn that short-let apartments in Lagos and Abuja are booming thanks to a surge in tourism and business travel.
In 2023, Nigeria welcomed over 1.2 million international visitors, marking a 20% increase from the previous year. This influx of tourists has made short-let apartments a hot commodity, especially in bustling cities like Lagos and Abuja. These cities are not just attracting international tourists; domestic tourism is also on the rise, with three million trips recorded in 2023, up 20% from 2022.
The youth, particularly those aged 18 to 35, are driving this trend, making up 65% of domestic trips. This young demographic is keen on exploring their own country, and they prefer the flexibility that short-let apartments offer. It's not just about leisure; business travel is also a big factor. Lagos and Abuja are business hubs, and the demand for convenient, flexible accommodation is high among business travelers.
Platforms like Airbnb have seen a noticeable increase in short-let listings, providing travelers with more options and flexibility. This trend is reshaping the property market, making short-let apartments a smart investment. Investors are catching on, recognizing the potential for high returns in these vibrant cities.
For those considering property investment in Nigeria, short-let apartments in Lagos and Abuja offer a promising opportunity. The combination of rising tourism, a young population eager to travel, and the bustling business environment makes these cities ideal for such investments.
Sources: Naija Houses, Nairametrics
8) Consider properties near new government projects or infrastructure developments for high returns, as these areas often appreciate rapidly
Investing in properties near new government projects or infrastructure developments can be a smart move because these areas often see a rapid increase in property values.
Take Nigeria's Renewed Hope Estates Program, for instance. This initiative involved building thousands of housing units, which not only created jobs but also gave the local economy a significant boost. When such developments occur, property values tend to rise as more people are drawn to live and work in these vibrant areas.
In Lagos, the transformation of the Lekki Peninsula and Eko Atlantic City is a perfect example. The construction of new roads and bridges turned these areas into bustling commercial hubs, driving up both property demand and prices. This trend is expected to continue, with the government planning more infrastructure projects that are likely to attract both local and foreign investors.
For those considering property investment, it's worth noting that areas with ongoing infrastructure projects often experience rapid appreciation. This is because improved accessibility and amenities make these locations more desirable, leading to increased demand and higher property values.
Moreover, investing in such areas can offer a sense of security, as government-backed projects typically ensure long-term growth and stability. This makes them attractive not just for immediate returns but also for future gains.
So, if you're thinking about buying property, keep an eye on regions where new developments are underway. These areas are likely to offer promising opportunities for both personal and financial growth.
Sources: Nigeria Developing 10,112 Housing Units Nationwide Under Renewed Hope Estates Programme, Is Lekki the Future of Lagos Property?, Eko Atlantic City Ahead on Land Price Increase in Q3’16 as Naira Loses Value
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) Don’t underestimate property maintenance and management costs in Nigeria, as infrastructure challenges can make them higher than expected
In Nigeria, property maintenance costs have surged recently.
One major reason is the removal of the fuel subsidy, which has made construction pricier. This change, along with FX harmonization, means that building and maintaining properties now cost more. As a result, property owners are feeling the pinch with higher maintenance expenses.
Power outages are another headache. Nigerians are spending a whopping $10 billion annually on generator upkeep and fuel. This heavy reliance on generators not only strains wallets but also contributes to environmental issues due to high carbon emissions.
Getting around can be tough too. Many roads are in poor condition, which increases vehicle wear and tear, making it more expensive to access properties. This is a common issue that adds to the overall cost of property management.
Water supply is another challenge. With unreliable public water systems, many property owners have to invest in private boreholes or water tankers. This necessity further drives up the operational costs of managing properties.
These factors highlight the importance of not underestimating property maintenance costs, as they can be higher than expected due to these infrastructure challenges.
Sources: Inquirer, Northcourt Real Estate, The Guardian
10) Invest in low-cost housing projects in Nigeria, as government initiatives support affordable housing to reduce the housing deficit
In 2023, Nigeria's housing deficit reached a staggering 28 million units.
This shortfall has prompted the government to roll out initiatives like the National Housing Fund and the Family Homes Fund. These programs are designed to make housing more affordable, especially for low-income families, by providing financial support and encouraging investment in housing projects.
With more than half of Nigeria's population now living in cities, the urban growth rate is a rapid 4.3% annually. This urbanization is driving up the demand for affordable housing, making it a prime time to consider investing in low-cost housing projects.
Investors can benefit from government-backed initiatives aimed at reducing the housing deficit. These programs not only offer financial incentives but also align with the growing need for affordable housing solutions in urban areas.
As cities expand, the pressure to provide adequate housing increases, creating opportunities for those willing to invest in the housing sector. The government's focus on affordable housing is a response to this urbanization trend, which shows no signs of slowing down.
Sources: Dataphyte, Novatia Consulting, NES Group
11) Consider joining local real estate investment clubs, as they are gaining popularity for pooling resources and sharing opportunities
In Nigeria, real estate investment clubs are gaining popularity among locals.
Traditionally, real estate was dominated by individual investors or big corporations, but now, locals are pooling resources to explore new opportunities together. This shift is quite a change in a market where personal ownership was once the norm.
Take the Wealth Builders Investment Club, for example. In just five years, its membership skyrocketed from 10 to over 100, highlighting a growing interest in collaborative investing. This trend is reshaping how people think about property investment.
Online platforms like Villa Afrika Realty are also playing a role by facilitating investment pooling. These platforms make it easier for people to join forces and invest in real estate, a concept that seemed unlikely not too long ago.
With these clubs, locals are finding new ways to enter the real estate market, making it more accessible to those who might not have ventured into it alone. This collaborative approach is opening doors for many aspiring investors.
As these clubs continue to grow, they are changing the landscape of property investment in Nigeria, offering a fresh perspective on how to build wealth through real estate.
Sources: Investment Clubs in Nigeria: A Smart Finance Move?, Real Estate Investment Club | Nigeria - Villa Afrika Realty
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.