Real estate is real property that consists of land and its improvements, which include buildings, fixtures, roads, structures, and utility systems. Investors cherish real estate because it affects all sectors of the economy and is a ‘guaranteed investment’. It can be categorised as residential, commercial, office, industrial, hospitality and tourism including hotels and holiday resorts, agricultural, educational, health, services, etc. Real estate still remains one of the most highly sought after investment havens globally especially because of its rapid appreciation rate and low rate of risks. Insecurity, high rate of foreign exchange, high loan interest rate, high prices of building materials, high unemployment rate and low rate of access to land including complex titling process are some of the factors why real estate is begrudged by some people. Nigeria’s real estate market is poised for significant growth in 2026, driven by various factors. Here is a breakdown of what to expect.
Growth prospects: Property prices are expected to increase by 5 – 15 percent annually in major cities like Lagos and Abuja. Residential real estate (RRE) will lead the pack as investors try to bridge the wide gap between housing need and provision put at 28 million units by experts. Real estate investors who are desirous of investing in RRE must be cautious to hit the nail on the head by developing houses that are required by the market. A tour of the cities shows that it looks as if the RRE market in Nigeria is saturated as there are a lot of vacant residential houses in the cities of Abuja, Lagos, Port Harcourt and Kaduna. These are houses that the developers are finding difficult to sell due to their high prices and locations. Specifically, real estate will boom around the airport road (Umaru Musa Yar’Adua Expressway), Keffi Road, Gwagwa Road, Inner and per-urban Abuja and Gwarimpa area in Abuja. There will be temptation to sell the parks and green areas by the authority but they must be aware that green areas, especially parks and recreation areas in the cities make a good living!
In Lagos State, Epe in the south east of the state will witness tremendous growth! People will also be interested in investing on the islands like Agboyi Ketu, Oriade and Tarkwa Bay because of the improved water transportation in the state. The Lagos to Calabar Coastal Road will attract a lot of institutional investors because of its potential. At Port Harcourt in Rivers State, Eneka, Choba Road, Aba Road, Old GRA, Peter Odili Road, Ada George Road by Agip and Eagle Island will be fascinating. Rental yields are projected to remain stable, ranging from 6-8 percent in major cities with six percent (6%) yield for residential, seven percent (7%) for industrial and eight percent (8%) for commercial land use. People in the south west should be watchful of Lagos – Ibadan Expressway, especially the Sagamu Interchange axis. The rapid rate of industrialisation of this area will boost demand for residential apartments. Also, the youths, who have been priced out in the cities will like to move to this peri-urban area.
The real estate market is expected to benefit from a stronger naira, lower inflation, and steady tax reforms, which could lead to increased investor confidence. Investors will be interested in affordable housing because Nigeria’s tax laws provide tax benefits for both low-income individuals and real estate developers involved in affordable housing, primarily through personal income tax reliefs and Value Added Tax (VAT) exemptions on real estate transactions and building materials.
The key trends that will make real estate achievements unprecedented in 2026 are:
- 2026 is an election year: The popular political parties will host their primaries in the first quarter of the year as the major governorship and presidential elections will likely take place in the last quarter of the year. Money usually flows in election years.
- Affordable housing: The demand for affordable housing is on the rise, driven by urbanization and population growth. There will be more government housing initiatives and private developers should focus on affordable housing projects.
- Sustainable development: There is a growing trend towards sustainable and eco-friendly construction practices especially in Atlantic City, Lekki, Banana Island, Ikoyi in Lagos; Maitama, Asokoro and Wuse II in Abuja; and Old GRA and Rainbow City in Port Harcourt, with developers incorporating features like solar power, smart features like lighting and heating, ventilation and air conditioning (HVAC), advanced security and energy management tools and green spaces into their projects.
- PropTech: Technology is transforming the real estate sector, with innovations like virtual reality property tours, data-driven market insights, and blockchain-based land registries gaining traction. The Lagos State e-government portal provides online public access to all of the state’s electronic land management solutions. Investment hotspots in Lagos State include the Lekki-Epe corridor which is expected to remain a prime focus for residential, commercial, and industrial real estate due to its proximity to the Lekki Free Trade Zone, Lagos to Calabar Coastal Road and the Dangote Refinery. Abuja’s real estate market is expected to benefit from its status as the federal capital, with growing demand for residential and commercial properties. Port Harcourt’s market is linked to the oil and gas sector, and stable energy prices could lead to increased demand for high-quality residential estates.
There are challenges in the real estate sector in Nigeria despite the high housing deficits, which stands at approximately 22-28 million units. These challenges include the fact that new housing supply additions are falling short of requirements. Regulatory challenges are a big hiccup in the property development process involving not less than six agencies in Lagos State. Bureaucratic processes and regulatory challenges are affecting the ease of doing business in Nigeria’s real estate sector.
Overall, Nigeria’s real estate market is expected to experience momentous growth in 2026, driven by a combination of factors including impact of Diaspora Nigerians’ remittances. Investors and developers who are prepared to adapt to changing market trends and regulatory requirements are likely to benefit from the opportunities arising in the sector.
Olufemi Adedamola Oyedele, MPhil. in Construction Management, managing director/CEO, Fame Oyster & Co. Nigeria, is an expert in real estate investment, a registered estate surveyor and valuer, and an experienced construction project manager. He can be reached on +2348137564200 (text only) or femoyede@gmail.com
Problem with Nigeria Revision of first-hand account of the AGSMEIS programme (2)