Is Nigeria’s Real Estate Bubble About to Burst or Just Beginning?

ESV Adeolu Emmanuel Adejimi,

Nigeria’s real estate sector has experienced tremendous growth over the last two decades, particularly in major urban centers like Lagos, Abuja, and Port Harcourt. From upscale residential estates to sprawling commercial developments, construction has been booming. Despite economic challenges, the sector has continued to attract investors, both local and foreign. But as property prices soar often far beyond the purchasing power of the average Nigerian. Experts and observers are beginning to ask a pressing question: is Nigeria’s real estate bubble about to burst, or is the boom just beginning?

A real estate bubble occurs when property prices rise rapidly to levels that are not sustainable, often fueled by speculation, easy credit, and unrealistic demand projections. These bubbles typically end in sharp declines, where property values crash and investors incur heavy losses. In countries like the United States (2008) and China (in more recent years), the bursting of real estate bubbles has had massive economic consequences.

In Nigeria, signs of a bubble are visible. Property prices in some parts of Lagos and Abuja, for example, have reached levels that are unaffordable for most Nigerians. In Ikoyi, Banana Island, and Lekki, the price of a modest duplex can run into hundreds of millions of naira. Yet, many of these high-end properties remain unoccupied for years either because they were built for speculative purposes or priced well beyond the reach of actual demand. This oversupply of luxury housing, coupled with a shortage of affordable homes, raises questions about the long-term sustainability of the market.

Moreover, the majority of Nigerians still struggle with access to housing finance. Mortgage penetration remains extremely low—less than 1% of GDP compared to over 30% in advanced economies. Most people still rely on personal savings or cooperative loans to build or buy property. This means the real estate boom is largely being driven by a small group of wealthy individuals and developers, not by broad-based demand. When a market is this narrow, any economic shock such as inflation, currency devaluation, or political instability can trigger a collapse.

However, while certain segments of the market may be overheating, it would be wrong to assume the entire real estate sector is on the verge of bursting. In fact, Nigeria’s housing deficit remains alarmingly high estimated at over 17 million units. The demand for affordable and mid-income housing continues to grow, particularly in rapidly urbanizing states like Ogun, Nasarawa, and parts of the South East. The growth of e-commerce and logistics is also driving demand for warehouses and distribution hubs, while retail and hospitality developments are picking up again after pandemic slowdowns.

In many ways, Nigeria’s real estate story is one of two markets: one dominated by overbuilt luxury properties sitting vacant, and another where millions are in desperate need of affordable housing. The luxury market may face corrections, but the demand for practical, affordable homes is just beginning to be addressed.

For the market to grow sustainably, certain reforms are essential. Government policy must shift towards enabling mass housing schemes, offering incentives for affordable housing development, and improving access to mortgage finance. Land titling must be streamlined to reduce legal uncertainty and attract more institutional investment. Furthermore, developers must start building based on real demand, not speculative assumptions.

Technology can also play a role. Proptech platforms that provide transparency, price comparison, virtual tours, and verified listings can help buyers make informed decisions and reduce fraud a major issue in Nigerian real estate.

So, is Nigeria’s real estate bubble about to burst? The answer depends on which part of the market you’re looking at. While the high-end segment may face corrections due to oversupply and affordability issues, the broader market is far from saturated. With the right policies, innovation, and focus on inclusive housing, Nigeria’s real estate sector may not be collapsing it may just be getting started.

ESV Adeolu Emmanuel Adejimi, a registered Estate Surveyor and Valuer is currently the branch Chairman of the Nigerian Institution of Estate Surveyors and Valuers, Ogun State Branch