As Nigeria’s real estate sector gears up for robust growth in 2025, experts predict that a combination of urbanization, population expansion, and rising demand for housing will fuel the market’s trajectory. Despite economic challenges, the sector has proven to be resilient, making it a promising avenue for long-term wealth creation and financial stability.
Akintoye Adeoye, President of the Real Estate Developers Association of Nigeria (REDAN), expressed optimism for the industry, stating, “We expect the real estate sector to improve in 2025.” Below are five compelling reasons why now could be the perfect time to invest in Nigeria’s property market.
1. Growing Demand for Housing
Nigeria’s population, currently over 220 million, is expected to exceed 400 million by 2050, according to United Nations projections. This rapid demographic expansion has led to a significant housing deficit—over 28 million units, as reported by the Federal Mortgage Bank of Nigeria (FMBN). Urban migration, particularly to cities like Lagos, Abuja, Ibadan, and Port Harcourt, has intensified demand for residential properties. With supply struggling to meet the surging demand, real estate investors, particularly those involved in rental housing, stand to benefit from high occupancy rates and steady rental income.
2. Appreciating Property Values
Despite ongoing economic volatility, property values in Nigeria have demonstrated remarkable resilience. In the third quarter of 2024, the real estate sector grew by 5.3%, according to the National Bureau of Statistics (NBS), underscoring the sector’s underlying strength. Real estate has now overtaken oil and gas, becoming Nigeria’s third-largest contributor to GDP.
In key areas like Lekki, Ikoyi, and Victoria Island in Lagos, property values saw an average increase of 15% in 2024, a trend expected to continue into 2025. These appreciating property prices, especially in emerging urban areas, make real estate an attractive option for capital growth.
3. Lucrative Rental Yields
The rental market in Nigeria remains highly profitable, fueled by the growth of the urban workforce and a rising number of individuals unable to afford homeownership. In prime locations such as Lekki, Yaba, and Ikeja GRA, rental yields have consistently ranged between 6% and 12% annually, outperforming other investment options like fixed deposits.
Furthermore, the demand for short-let apartments and co-living spaces—particularly from young professionals and expatriates—presents an opportunity for substantial passive income. The success of the 2024 “Detty December” period, which saw hotels generate $44 million and short-let apartments yield $13 million in just one month, demonstrates the lucrative potential of Nigeria’s rental market.
4. Supportive Government Policies
Several government initiatives are designed to facilitate real estate investment, making the sector more attractive to both local and foreign investors. In states like Lagos and Ogun, the reduction of land registration fees and streamlined land documentation processes have eased property ownership. Additionally, affordable housing schemes offered by the Federal Mortgage Bank of Nigeria (FMBN), through low-interest loans under the National Housing Fund (NHF), continue to support prospective homebuyers.
Yomi Olugbenro, West Africa Tax Partner at Deloitte, highlighted the upcoming tax reforms set to take effect in July 2025, aimed at creating a more investor-friendly business environment. These reforms are expected to lower the operational costs for developers and investors, attracting both local and international capital.
5. A Hedge Against Inflation
With inflation reaching 34.8% in December 2024, real estate remains a reliable asset for wealth preservation. Unlike the volatile naira, property values in Nigeria have a tendency to appreciate over time, safeguarding investors’ purchasing power. Additionally, high-end properties catering to expatriates and business travelers offer opportunities for dollar-based earnings, providing a shield against currency depreciation.
Conclusion
For investors looking to build long-term wealth, Nigeria’s real estate sector presents a compelling opportunity in 2025. With increasing demand for housing, rising property values, attractive rental yields, government support, and a hedge against inflation, real estate remains one of the most stable and lucrative investment options in the country. Whether you’re a developer, financier, or private investor, the Nigerian property market promises substantial returns in the years to come.
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