Factors That Affect Property Prices in Nigeria

Ever wondered why property prices in Nigeria seem to be skyrocketing? Or why a house in Lagos costs significantly more than a similar one in another part of the country?

Well, the truth is, that several factors determine how much a property is worth.

Whether you’re an investor looking for the next big opportunity, a homebuyer trying to make the right decision, or just curious about the real estate market, this post will break it all down for you.

1. Location

You’ve probably heard it before, location is everything in real estate. And it’s true. A house in Ikoyi, Lagos, will cost you a fortune compared to a similar one in Abeokuta. Why? Because certain areas are in high demand due to their proximity to business districts, good roads, and modern amenities.

Properties in cities like Lagos, Abuja, and Port Harcourt tend to be more expensive than those in smaller towns.
Houses close to major roads, shopping malls, schools, and hospitals generally have higher prices.
Security matters too, nobody wants to live in a high-crime area, so safer neighbourhoods naturally attract higher prices.

If you’re buying property, location should be your number one consideration.

2. Demand and Supply

Ever noticed how rent prices in Lagos keep going up? That’s because there’s a higher demand for housing than there is supply. People are moving into cities every day, and the available houses can’t keep up.

Lagos alone has over 20 million people, and a large percentage of them need accommodation.
Developers are building luxury apartments, but what’s really in demand are affordable houses.
When there’s a housing shortage, prices increase, making it tough for the average person to buy a home.

So, if you’re thinking of investing, keep an eye on high-demand areas with limited housing supply.

Read This: How to Make Money from Short-Term Rentals in Nigeria

3. Economic Conditions

Nigeria’s economy plays a huge role in property prices. When inflation is high, everything, including building materials; becomes more expensive. That cost is passed down to buyers and renters.

If the naira weakens against the dollar, imported building materials become more expensive.
When people have stable jobs and good income, they can afford homes, driving prices up.
Government policies like interest rates and foreign exchange regulations also affect the market.

A strong economy = higher property prices. A struggling economy? Prices may stagnate, but they rarely drop significantly.

4. Infrastructure and Development Projects

Ever wondered why a plot of land in an underdeveloped area suddenly becomes expensive? Infrastructure.

New roads, bridges, and railways make an area more accessible, increasing property value.
Estates with stable electricity, good water supply, and paved roads attract higher prices.
When the government or private developers invest in an area, property prices tend to rise.

A good example? The Eko Atlantic project in Lagos, an entirely new city built on reclaimed land. Property prices there are already through the roof.

5. Government Policies and Regulations

Real estate isn’t just about buying and selling; government policies play a major role too.

Land Use Act: In Nigeria, land ownership isn’t as straightforward as in other countries. You have to deal with land titles and the government’s involvement in land allocation.
Property Taxes: The cost of acquiring land, registration fees, and other legal charges add up.
Housing Schemes & Mortgage Plans: Government programs can make housing more affordable, but access to these schemes is often limited.

If you’re investing, always check the legal requirements before making a purchase.

6. Cost of Building Materials and Construction

Building materials aren’t cheap, ask any developer.

Cement, iron rods, roofing sheets, and tiles are all affected by inflation.
Since Nigeria imports a lot of these materials, fluctuations in exchange rates can increase costs.
Locally sourced materials could be a game-changer, but they’re not always available at scale.

This is why a duplex in 2020 doesn’t cost the same as a similar one in 2025. Construction costs keep rising.

7. Real Estate Market Trends

The way people buy and rent homes is changing.

Short-term rentals like Airbnb are booming, pushing up prices in tourist-friendly areas.
Nigerians in the diaspora are buying homes back home, increasing demand in premium locations.
Social media and digital marketing have made property sales easier, exposing more people to available properties.

If you’re an investor, staying ahead of these trends could help you make smarter decisions.

8. Accessibility to Financing and Mortgage Options

Buying a house outright is expensive, so mortgages should be an option, right? Unfortunately, in Nigeria, access to financing is a major issue.

Interest rates on loans are high, making it difficult for the average person to afford a home.
Many banks require large down payments before approving mortgages.
Government-backed mortgage schemes exist but aren’t easily accessible to everyone.

If Nigeria had a more accessible mortgage system, more people would own homes instead of renting for years.

9. Security and Political Stability

Nobody wants to buy property in a conflict zone or an area with high crime rates.

Places with frequent kidnappings, robberies, or political instability struggle with low property values.
Foreign investors are wary of putting money into an unstable market.
Areas with stable governance and strong security attract more buyers and higher prices.

This is why Abuja’s property market remains strong, it’s the seat of government and considered safer than many other states.

10. Future Projections

So, what does the future hold?

Urban expansion will continue, meaning the outskirts of major cities will become more valuable.
Smart homes and green buildings will gain popularity.
More Nigerians in the diaspora will invest in property back home.
If the government improves mortgage systems, more people will buy instead of rent.

For investors, now is the time to start looking at upcoming real estate hotspots.

Conclusion

Nigeria’s real estate market is full of opportunities, but understanding the factors affecting property prices is key to making smart decisions.

Location is king—always consider accessibility, infrastructure, and security.
Demand and supply drive prices—if more people want a property, its value will rise.
The economy, government policies, and financing options matter, inflation, taxes, and mortgage rates play a huge role.

Whether you’re looking to buy, sell, or invest, staying informed will help you navigate Nigeria’s dynamic property market.

Are you considering buying a property soon? Drop a comment below, I’d love to hear your thoughts.