2024 ended with 33% headline inflation and over 200% loss in the Naira value in the last 24 months.
What is happening in Nigeria’s real estate market? Are
prices going up or down? Is Lagos still a hotspot for foreign investors? How is
Nigeria’s government impacting real estate policies and taxes in 2025?
These are the questions everyone is asking us every
day—professionals, buyers, and sellers alike, from Abuja to Port Harcourt and
beyond. Perhaps you’re wondering the same thing.
Nigeria’s real estate market is one of the most dynamic in
Africa. It is driven by a high population growth and a rapid urbanization. The real estate sector had a growth projection of 7.24% in 2024, amounting to a value of $2.14 trillion. By maintaining a
similar trajectory, the demand for real estate, particularly in key cities will
remain high.
Success in the Nigeria Real Estate would require more than
just capital. It will require a careful understanding of the market, good
timing, strategic thinking and partnerships that work. Let’s go through a
number of things to expect this year 2025.
A Boom in Residential Buildings
Nigeria is staying true to the global trend of rising
residential demand. The scale and evolution are unprecedented, ranging from
luxury towers to stretched-out villas, multi-family developments and new town
projects and more.
This isn't just about homes — developers have perfected
alternative products such as Site and Services, Shell and Core, and Gated
community schemes. These create distinct opportunities for increased
profitability in real estate business without the necessity to inject more
funds.
What will be the driving forces? Diaspora remittance and
urbanization.
Many residential buildings will be funded by Nigerians
abroad. Due to their unique experience and exposure to luxury we should expect
more creative housing delivery solutions to emerge. Internationally branded
residences will debut in Lagos, Abuja and some other parts of the country.
Inflation and Naira Devaluation: Challenge Meets Opportunity
The sudden increase in local inflation and FX levels
dominated industry discussions last year. This was bad new for many investors.
Yet within these challenges lie a greatest investment opportunity. Just as
water always find its path, consumers will always make ends meet. The exit of
many foreign companies has created some investment opportunities.
Health, education and leisure tourism are poised to
experience a domestic resurgence. There is likely to be a surge in
acquisitions, upgrades and strategic partnerships to develop hospitals,
schools, apartments and leisure centers targeted at demand that typically gets
this service abroad. The value of naira will consequently improve.
Infrastructure will Ease Business
The access to infrastructure (especially energy and
transportation) will clearly determine the preferred location of factories and
industrial parks. This will continue to keep most activities and supply traffic
for development concentrated in the old industrial hubs.
SEZs (Special Economic Zones) will remain the popular destinations for new investments. The Lagos Free Zone (Tolaram) , Eko Atlantic City , Alaro City
and others are at the forefront of these trends. These Public-Private Partnerships
(PPPs) are present conditions that reduce the initial risk and challenges of
real estate investment and the cost of navigating the complex regulatory
environment.
Business operators will seek for stability, reduced
operational cost and a shock-proof supply chain more than ever to remain
profitable amidst competition.
Facilities Management: The Rise of Property Technology
Facilities Management & Maintenance will stands out as
an important currency for the property industry. With over 6.9 million sq. ft.
of prime offices and retail stock and as the cost of newer buildings
sky-rocket, how to maintain older infrastructure will become a significant
competitive factor. A well maintained infrastructure will retain its economic value throughout its lifetime.
Despite the economic challenges there is a growing appetite
of property end-users for experiential amenities, luxury and class. This will
compel investors to prioritize maintaining highly functional services.
Stricter building regulations will raise construction costs, affecting property prices
As a result of the high incidence of building failures experienced in 2024 there will be stricter building
regulations in some major cities in the country. These stricter measures will
make our houses safer but more expensive.
The price of steel rods, which are essential materials for
construction, has gone up. This isn't just a random spike; it's partly because
builders now have to meet new, tougher standards. When materials cost more,
developers don't just absorb the hit—they pass it on to buyers. So, if you're
looking to buy, expect to see property prices rise as a result.
It is not just materials that are getting pricier. Stricter
rules from building regulators will also mean higher operational costs for
construction companies. Think about skilled labor and transportation—both are
getting more expensive, thanks to things like exchange rates and inflation. The
depreciation of the naira over that of its fellow West African countries has
led to the exit of many expatriate semi-skilled building professionals
(carpenters, masons etc). All these factors combined will push property prices
up. The FG has however embarked on massive training of
these artisans to cushion this effect.
Abuja’s property prices will rise moderately as government projects enhance infrastructure
Abuja under the current government is buzzing with new
infrastructure projects, thanks to a boost in government spending. The federal
government has approved a total of N159.5 billion for five major projects aimed at enhancing road networks, transportation, and estate
access across the Federal Capital Territory (FCT
In 2023, the Federal Capital Executive Committee gave the
green light to contracts worth N33.24 billion for key projects, focusing on
transportation and housing. These developments are set to transform the city,
making it more appealing for both residents and businesses. One of the standout
projects is the Abuja/Kaduna/Zaria/Kano road rehabilitation, which is expected
to be completed by 2025. This road will significantly enhance connectivity,
making travel smoother and faster.
With better roads and transport, Abuja will become a hotspot
for property seekers. The demand for homes and commercial spaces will rise,
driven by factors like population growth and urbanization.
The government's focus on these improvements will attract
more people and businesses to the Abuja and its neighbourhood. This influx is expected
to continue pushing property prices upward, making it a good investment
destination .
Trump political and Economic Stance
Economic experts think that Trump’s policies will be
consistent with strengthening the US economy, having a stronger dollar and
maintaining continued strength in US equities. Without doubts, I expect general
economic activities to increase in the US as he would likely borrow more and
increase government spending.
However, there will be two potential impacts on Nigerians
living in the US. If US residential prices increase, they would likely spend
their excess income on acquiring more real estate in the US as opposed to
investing in Nigeria. On the flip side, Trumps insistence on deportation of illegal immigrants may see some Nigerians returning home to invest their savings
and start all over again. There is no place like home.
But prices aren’t coming down
Property prices are not going to come down in 2025. The provision
of cheaper mortgages, reduced interest rates, availability of funding
will still take a few years before it can start to significantly affect real
estate prices. Demand is still too strong and far ahead of supply due to
increased urbanization. Limited infrastructure in areas people want to live,
and slow and inadequate supply of new homes in these areas would continue to
marginally push property prices up this year or at best, keep it stable.
The Gen Xers are coming back home
Nigerians living abroad who are already in their 50s/60s are
likely going to start the wave of ‘Japada’ not just due to the return of Trump
to the White House, but also as they are now empty nesters and have excess
cash. They will be looking for retirement estates, homes to live in. Homes in
Nigeria would become more affordable and attractive to them. Location,
security, neighborhood infrastructure and functionality of the homes in terms
of services and spaces will guide their decision on which estate to buy into.
Written by: Victor Okonkwo
Educator and Entrepreneur
Share:
