Stakeholders in Nigeria’s real estate sector say rising inflation and worsening affordability in 2025 significantly undermined investment, construction, and demand. Michael Egbekoya, CEO of McYouniverse Group, noted that national housing prices increased by an estimated 15 to 25 per cent year-on-year, with prime locations such as Ikoyi, Victoria Island, Maitama, and Banana Island seeing the highest growth. Peri-urban and emerging areas recorded moderate price increases, reflecting cost-driven inflation rather than purely demand pressures.
Egbekoya said affordable housing remained severely inadequate, with most developments accessible only to upper-middle-income earners. Entry-level home prices in many cities still exceeded five to seven times the average annual income, far above global affordability benchmarks. Government-led affordable housing schemes, he added, failed to meet the scale of demand, leaving a persistent gap in accessible housing for the majority of Nigerians.
The rental market also faced sharp increases in 2025. Estimated rent growth ranged from 20 to 35 per cent in major cities and 30 to 45 per cent in high-demand urban neighbourhoods, driven by high homeownership barriers, urban migration, rising construction costs, and short-let conversions reducing long-term rental supply. Construction material costs, particularly cement, steel, finishing materials, and labour, surged due to exchange rate depreciation, energy expenses, import dependency, and supply chain inefficiencies, further compounding the crisis.
Estate surveyor Olorunyomi Alatise highlighted a continued imbalance between housing demand and supply, with urbanisation and population growth putting immense pressure on limited housing stock. Proposed laws such as the Lagos Tenancy Law, if fully enforced, could bring greater order to property transactions, but without consistent implementation, the sector is likely to remain strained. Babatunji Adegoke, treasurer of the Nigerian Society of Engineers, said private sector interventions were insufficient to close the housing gap, particularly in affordable and social housing.
Looking ahead to 2026, stakeholders predict housing units will become more compact, while development in emerging and peri-urban locations is likely to expand as infrastructure improves access and affordability pressures push households away from city centres. Rising construction costs, energy expenses, and new taxes are expected to continue driving housing prices upward, underscoring the urgent need for deliberate policy interventions, alternative building materials, and improved housing finance solutions to enhance accessibility for low- and middle-income Nigerians.
