Here’re five reasons to invest in Nigeria’s real estate

The Nigerian real estate sector is set for significant growth in 2025, driven by rising urbanisation, population expansion, and increasing demand for housing.

Despite economic fluctuations, real estate remains a resilient investment option, offering long-term financial stability and wealth accumulation.

“We expect the real estate sector to improve in 2025,” said Akintoye Adeoye, president, the Real Estate Developers Association of Nigeria (REDAN) at a briefing recently.

Here are five key reasons why investing in Nigeria’s real estate market in 2025 could be a strategic financial decision:

High demand for housing

Nigeria’s population, currently estimated at over 220 million, is projected to surpass 400 million by 2050, according to the United Nations. This rapid growth has created a housing deficit of over 28 million units, as reported by the Federal Mortgage Bank of Nigeria (FMBN).

Urban centers like Lagos, Abuja, Ibadan and Port Harcourt are witnessing increased migration, fueling demand for residential properties. With supply failing to meet demand, investors in real estate—particularly in rental housing—stand to benefit from high occupancy rates and stable rental income.

Rising property values

Property prices in Nigeria have shown resilience despite economic challenges. According to data from Nigeria’s National Bureau of Statistics (NBS), the real estate sector grew by 5.3 percent in the third quarter of 2024, reflecting strong market fundamentals.

The sector is said to have overtaken oil and gas, becoming the third largest contributor to the Nigerian economy.

In Lagos, properties in high-demand areas like Lekki, Ikoyi, and Victoria Island appreciated by an average of 15 percent in 2024, and similar trends are expected in 2025. This makes real estate an attractive investment for capital appreciation, particularly in emerging urban districts.

Read also: Investing in real estate: A shield against naira volatility

Lucrative rental yields

Nigeria’s rental market remains highly profitable due to a growing urban workforce and affordability constraints for homeownership. According to Estate Intel, a real estate market data gathering firm, rental yields in prime locations like Lekki, Yaba, and Ikeja GRA range between 6 percent and 12 percent annually, outperforming fixed deposits and many other investment vehicles.

With a high demand for short-let apartments and co-living spaces, particularly among young professionals and expatriates, real estate investors can generate significant passive income from rental properties in 2025.

The 2024 Detty December frenzy holds key lessons for investors and property enthusiasts as hotels accounted for $44 million, while short-let apartments contributed $13 million for just the one month period, opening an investment window.

Government policies

The Nigerian government has introduced several policies to support real estate investment, including: reduction in land documentation costs as some states, such as Lagos and Ogun, have streamlined land registration to encourage property ownership.

There are equally affordable housing schemes introduced by the Federal Mortgage Bank of Nigeria (FMBN) that continue to offer low-interest loans through the National Housing Fund (NHF) to support homebuyers.

The proposed tax reforms which are set to take off in July will affect the real estate sector, according to Yomi Olugbenro, West Africa Tax Partner, Deloitte, adding that the essence of the policy is to make “doing business in Nigeria easy”.

“If you’re investing in the real estate sector in Nigeria, you’re a developer, or you’re a financier, or you’re even a private developer. There’s some cost.

“The idea is how do we make the business environment a lot easier. How do we use tax as a tool to attract both local and foreign capital? That’s at the heart of what the reform is trying to do,” Olugbenro said.

These initiatives make investing in real estate in Nigeria more attractive, particularly for developers and long-term investors.

Hedge against inflation

With Nigeria’s inflation rate at 34.8 percent as of December 2024, real estate remains one of the best ways to protect wealth against inflation. Unlike the naira, which has experienced volatility, real estate values tend to appreciate over time, preserving purchasing power.

Additionally, real estate investments in Nigeria offer opportunities for dollar earnings, especially in high-end short-let apartments catering to expatriates and business travelers. This provides investors with protection against currency depreciation.

Investing in Nigeria’s real estate market in 2025 presents a strategic opportunity for long-term financial growth. With high demand, rising property values, strong rental yields, and government support, real estate remains a stable and rewarding asset.