Economic Volatility Stifles Nigeria’s Real Estate Investment; House Prices Surge 40%
A new industry report has painted a sobering picture of the Nigerian property sector, revealing that a "volatile economic climate" and persistent uncertainty significantly discouraged both domestic and foreign real estate investment throughout 2025.
According to the 2025 Nigeria Real Estate Report released by prominent valuation firm Ubosi Eleh & Co., the sector is grappling with massive supply chain disruptions, naira devaluation, and a staggering spike in the cost of essential building materials.
The Inflationary Pressure on Housing
The report highlights that the rising cost of cement, steel, and labor has made new developments increasingly expensive. This sentiment was echoed by Frank Okosun, CEO of Knight Frank Nigeria, who noted that inflation has forced a dramatic shift in market pricing.
"We have seen a sharp rise in house prices to about 40 percent due to inflation, both for sales and leases," Okosun stated. He emphasized that newly built properties are particularly affected, as they must reflect the current high costs of construction inputs.
Key Findings from the 2025 Report:
Project Delays: Economic uncertainty and supply chain issues have led to widespread project delays and significant cost overruns.
Investor Hesitation: Stakeholders are increasingly adopting a "wait-and-hold" strategy, pausing capital-intensive projects in favor of more "capital-efficient" ventures.
Rental Hikes: Rising operational costs, including utility bills and maintenance, have forced landlords to pass costs on to tenants, further straining affordability.
Demand for Affordability: Despite the gloom, there is a growing demand for affordable housing, presenting a niche opportunity for developers backed by government initiatives.
Expert Analysis: "Wait-and-Hold"
Emeka Eleh, Senior Partner at Ubosi Eleh & Co., warned that the devaluation of the naira is the primary driver of the sector's current productivity slump. The "wait-and-hold" approach mentioned by Knight Frank suggests that while capital is available, it is being diverted away from traditional brick-and-mortar developments until the macro-economic environment stabilizes.
