Nigeria’s real estate sector is facing a critical period marked by both serious challenges and emerging opportunities, according to a new report released by Ubosi Eleh and Company, an estate surveying and valuation firm. The firm’s Nigeria Real Estate Report 2025 describes the market as a “dynamic mix of opportunities and challenges,” as businesses and households continue to deal with harsh economic conditions.
According to the report, 2024 was a tough year across sectors, particularly for real estate. The sector was affected by the general economic hardship faced by Nigerians, with demand for housing weakening, investor confidence declining, and construction costs rising sharply. The firm noted that high interest rates and the rising cost of borrowing made it difficult for developers and buyers to access funding, thereby slowing down capital formation and investment in property.
The report linked many of these challenges to broader macroeconomic reforms introduced by President Bola Ahmed Tinubu in 2024. It described the year as one of “economic recalibration,” during which the president pursued bold reforms to fix long-standing structural problems. However, these policy changes came with side effects, including reduced consumer spending, volatile exchange rates, and higher prices for imported building materials.
With most construction inputs sourced from abroad, exchange rate instability drove up material costs, making property development even more expensive. At the same time, consumers’ purchasing power declined due to rising inflation and stagnant incomes, putting pressure on demand for real estate. Despite these issues, the report pointed out that Nigeria’s real estate market still holds long-term promise, especially because of the country’s large and growing population, rapid urbanisation, and ongoing housing shortage.
The residential sector, in particular, remains central to the Nigerian property market. Demand continues to come mainly from urban growth and the expansion of the middle class. These trends, according to the report, will continue to shape the future of residential housing demand, even as buyers become more cautious and developers rethink their strategies.
On the brighter side, the report projects that 2025 holds a positive outlook for some key segments of the real estate market. For instance, the warehousing and logistics sector is booming, thanks to the rise of e-commerce and better Internet penetration across the country. The demand for warehousing space is expected to grow as more companies expand their logistics operations to meet customer expectations in a digital-first economy.
In the commercial property segment, office spaces are adjusting to new work styles such as hybrid and remote work. Businesses are reconfiguring their office needs, which has led to changes in the kind of commercial real estate that is in demand. Similarly, the retail sector is also adapting as consumer habits evolve, with more people shopping online and retailers seeking flexible, cost-effective spaces.
The report also highlighted impressive growth in hospitality real estate, noting a rise in luxury hotels, expansion of mid-tier and budget options, and the increasing popularity of serviced apartments. The entry of more international hotel brands and the steady growth of domestic tourism and business travel are creating new opportunities for investors. Ubosi Eleh and Company believes that technological innovation and strategic diversification in accommodation types will support long-term development in this space.
Overall, the report concluded that with strategic planning and flexibility, investors can still make profitable moves in the Nigerian real estate sector despite the current headwinds. It urged real estate stakeholders to remain alert to demographic shifts, digital trends, and changing consumer behaviour in order to stay ahead in a fast-evolving market.
