Nigeria, a country of over 230 million people, has the natural resources, land and population base to support one of the most dynamic real estate sectors in Africa. Yet, despite its size and potential, the industry remains largely underdeveloped, underperforming and under pressure.
According to economic experts, real estate should be a pillar of national growth, providing homes, commercial spaces, and industrial hubs, but the reality in Nigeria is far more complex.
In 2024, the real estate sector contributed 5.6 percent to Nigeria’s Gross Domestic Product (GDP), up from 5.2 percent the previous year. The increase may appear marginal, but it signals a steady rise in importance, driven by demand for housing, logistics spaces and commercial developments. The question that hangs over Nigeria’s future is simple: will the real estate sector become the catalyst for wider economic transformation, or will it remain a promise unfulfilled?
Opportunities in a growing market
Experts believe the opportunities are vast and growing. Innocent Merckson Okoro, Principal Partner at MI Okoro and Associates, highlighted the major avenues for expansion. He pointed out that Nigeria’s population and urban growth have created demand across housing, commercial, industrial and agricultural property. “Residential development helps to increase rising demand for affordable housing in urban areas while commercial and retail spaces are being driven by the growing middle class,” he explained.
He noted that Nigeria’s retail market is especially vibrant.
“In Nigeria’s real estate market, you will find retail spaces ranging from small, standalone shops and strip malls to larger, organized shopping centers and shopping malls. These are prime locations designed for direct consumer sales, such as clothing boutiques, restaurants, grocery stores, and salons, with their success dependent on factors like location, high visibility, foot traffic and nearby demographics,” Okoro said.
Industrial real estate is also emerging as a powerhouse
“In Nigeria, industrial real estate includes property types such as warehouses, manufacturing plants, and distribution centers, which are vital for logistics, storage, and production. These properties are strategically located in areas like the Lagos-Ibadan-Ilorin corridor or near ports for effective supply chain operations. You can also find them along Trans-Amadi Road in Port Harcourt, the New Market Road in Onitsha and the Cameroon Road in Aba. The Nigerian industrial real estate market is experiencing growth, driven by factors like economic diversification, government policies that attract investment, and increasing demand from growing sectors such as e-commerce, manufacturing, and logistics,” he explained.
Thompson Ekwere, a Lagos-based clearing agent, reinforced this point. He described industrial real estate as one of the most dynamic parts of Nigeria’s property sector. “This fit is primarily defined by the robust demand for logistics and warehousing, a growing number of industrial parks, and significant investment, despite persistent infrastructure challenges,” he observed.
He linked the surge to e-commerce, noting that online retail has fueled an unprecedented demand for storage and distribution. “Internet businesses have variously caused the explosion of online retail and are fueling a massive need for modern, strategically located warehouses and distribution centers to enable faster delivery times. It has spurred about 20 percent growth in the logistics real estate segment over the last few years,” Ekwere revealed.
According to him, government-backed initiatives are adding to the momentum.
“The government is establishing specialized industrial and agro-industrial parks across the country to attract foreign and local investment. Examples include the Lagos Free Zone and the newly commissioned Digital Industrial Park in Kano. These zones offer incentives like tax breaks and improved infrastructure to stimulate industrial activity,” he added.
Challenges holding the sector back
Despite the opportunities, Nigeria’s real estate industry is constrained by persistent challenges. Land title acquisition remains a major stumbling block, with investors often forced to navigate layers of bureaucracy before securing approvals. “Policy somersault and frequent changes in government directives and regulations can create unpredictable environments for real estate investment,” Okoro admitted. Political patronage and cronyism, he added, often worsen the problem, leaving investors stranded in a maze of bottlenecks.
The oil-dependent economy further complicates matters. Fluctuations in global oil prices affect household incomes, investor confidence, and demand for housing and office spaces. During downturns, construction slows, property values stagnate, and vacancy rates increase. While government policies such as the Economic Recovery and Growth Plan (ERGP) aim to diversify the economy and boost demand for industrial spaces, inconsistency often undermines implementation.
For Ekwere, these challenges are not insurmountable but demand urgent reforms. “The Nigerian real estate sector holds transformative potential for economic growth, job creation, and social development. If properly harnessed through reforms, investment, and technology, it can become the cornerstone of national progress. This will be facilitated if we act decisively and invest meaningfully in this untapped goldmine,” he said.
Urbanisation adds another layer of complexity
Joash Enendu, a real estate developer in Lagos, described the housing deficit as one of the country’s most urgent economic threats. “Rapid population growth and urbanization put huge pressure on housing and infrastructure in Nigeria. According to him, while they can drive demand for real estate, they also maintain the need for sustainable development plans to ensure that growth is managed effectively and that the necessary infrastructure is in place to support it,” he explained.
He warned that Lagos, Nigeria’s economic nerve center, is at the heart of the crisis. “Here in Lagos State, the epicenter of Nigeria’s urbanization and home to a rapidly growing population, the demand for housing continues to outpace supply by significant margins. The resulting housing deficit poses a critical challenge, one that the current administration feels determined to address head-on,” he said.
Real estate, technology and the human factor
Beyond policies and population, real estate in Nigeria is also about human choices, about discipline, planning, and innovation.
Mrs. Monica Efe Osaghae, Managing Director of Efe Enterprise Limited, argued that many in the sector undermine their own success by mismanaging funds. “People who are into real estate are often seen as money mongers, but I can tell you, there is no business that does not spin money. It depends on the way and manner you pursue the business,” she explained.
She stressed that patience is key. “Most people will not allow their business to run off the gestation period before they start spending from it. To an extent you grow your business, you will not worry because you have already made some valuable contacts including some people who can grant you credit facility,” she said. Her warning was blunt: “If you want to develop an estate and borrow money from the bank and instead of using the money to develop projects, you use it to entertain visitors; you will eventually run yourself amuck.”
Osaghae insisted that poor choices ripple across the industry. “Real estate affects people in different ways. Some are affected positively while many are affected negatively because they fail to learn the rudiments of business,” she noted.
Still, she believes the sector has enormous potential if combined with new tools. “Technology is rapidly transforming the real estate industry, enhancing efficiency, transparency, and client satisfaction through innovations like online marketplaces, virtual tours, digital documentation, and AI-powered tools. So if you update yourself with the new technologies, you will remain compliant in real estate operations,” she advised.
Nigerians in the diaspora are another untapped force. Remittances are already a major contributor to Nigeria’s economy, and with transparent systems, more of this money could flow into real estate.
Land Use Act and the burden of bureaucracy
Land ownership in Nigeria remains entangled in complications, largely due to the Land Use Act of 1978, which vests control of land in the hands of state governors. This arrangement has created bottlenecks that slow down transactions and often leave titles in dispute. “Many lands have unclear titles or are subject to disputes which make transactions risky and tiring,” a stakeholder noted.
To address broader environmental concerns, the Environmental Defenders Network (EDEN) has urged lawmakers to elevate environmental protection to the status of a fundamental right in the Constitution. Presenting a memorandum in Lagos at the House of Representatives Committee hearing on constitutional review, EDEN’s Executive Director, Prince Chima Williams, said:
“The environment is captured in Section 20 of the 1999 Constitution, which is under Chapter 2; directive principles of state policy, which is a mere statement of intent of the government. It is unenforceable, and we are saying that because of the pivotal place of the environment as life depends on it, it should be moved into Chapter 4, the fundamental rights provision of the Constitution.”
Williams also called on the Chief Justice of Nigeria to establish environmental courts within existing federal and state courts, insisting that “environment matters are life and death issues that should be handled with dispatch.”
High cost of construction and financing hurdles
Nigeria’s property sector is further strained by the soaring cost of construction. Inflation, import tariffs, and weak local manufacturing push up prices of building materials and labour, making housing development highly expensive. This translates into fewer affordable housing options for buyers and renters.
Equally troubling is the challenge of financing. “High interest rates, strict loan conditions, and lack of specialized real estate financing options make it difficult for agents and homeowners to access the capital they need,” developers lament. The result is a constrained pipeline of projects and limited scope for large-scale investment.
Insecurity, legal bottlenecks and environmental threats
Persistent insecurity, terrorism, kidnapping, and communal conflicts, continues to weigh heavily on property values and investor confidence. Areas perceived as unsafe remain unattractive to potential residents or buyers, further slowing development.
The legal system compounds the problem with slow, sometimes compromised processes.
“The enforcement of property rights and resolution of disputes drags on, deterring investors who seek a clear and efficient legal framework,” analysts warn.
Meanwhile, environmental challenges such as flooding, erosion, and climate change add further risks. Without careful planning and strong infrastructure investment, these issues threaten to complicate real estate development even more.
