The Nigerian Property Market: Challenges and Opportunities

With titless such as “The Giant of Africa”, and Africa’s largest economy, Nigeria is well on its way to also being regarded as home to some of the most expensive real estate in Africa. Recent figures released by CBO Capital valued the country’s real estate sector at N6.4 trillion, about $32 billion. Despite the array of opportunities and complex challenges faced in the country, only savvy investors will successfully convert these challenges to profitable opportunities.

The Nigerian property market is most attractive to investors at this time because of the high return on investments. In a market where one can expect a return of 30-35 percent of his investment, landlords and investors are sure to find favorable opportunities in this market.

The high-end Lagos market is evidence for potential profitable investments in the country’s real estate market. As of May 2015, the average selling price of property in Lagos was N13.4 million (per bedroom), while the average rental price per bedroom was N694,000. Property rentals in Ikoyi are being rented for N2.8 million monthly on average, while areas like Apapa and Maryland are being rented for a monthly price of N762,000 and N679,000 on average, respectively.

While such prices raise the hopes of investors in the Nigerian property market, there is still high demand for affordable housing. Despite the steady rise of Nigeria’s middle class, over 87 million Nigerians are still living on less than $1 a day. This presents both challenges and opportunities in the market, as there is a clear indication that the housing market will grow significantly in the coming years. However, investors must also consider the spending power of the majority of the population, and ensure they are not priced out of the market.