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Nigeria’s real estate industry accounted for 13.1 per cent of the country’s real Gross Domestic Product in the first quarter of 2026, highlighting the sector’s growing importance to economic activities despite persistent challenges in the housing market.
The contribution was reported in Knight Frank’s first-half 2026 Lagos Market Update, which examined trends in residential, commercial and industrial property markets across the country.
However, the sector continues to face significant obstacles, including high construction expenses, rising rents and difficulties accessing affordable homes. These challenges have affected both property developers and Nigerians seeking accommodation, particularly in major urban centres where demand remains high.
Lagos continues to experience considerable pressure on its housing market, with rental prices in some upscale neighbourhoods increasing substantially since 2023. The rising cost of accommodation has encouraged more residents to consider smaller apartments and properties in locations outside the city’s most expensive districts.
The report also pointed to infrastructure development as a factor influencing property investment decisions. Improved transport links and ongoing road projects are expanding interest in previously less-developed locations, particularly along the Lekki-Epe corridor, where residential and commercial developments continue to emerge.
Beyond housing, Nigeria’s commercial property market is undergoing changes as businesses assess rental costs and workplace requirements. Some office landlords in Lagos are adopting flexible leasing arrangements and offering incentives to attract tenants, while industrial locations are benefiting from demand for facilities that support manufacturing, logistics and other business operations.
In Abuja, property prices have increased in several districts, with Guzape recording notable appreciation. Redevelopment projects in established neighbourhoods are also creating opportunities for investors, while the commercial property segment has experienced growth in rental values.
Port Harcourt’s property market, meanwhile, remains influenced by the oil and gas industry, with demand for residential accommodation, offices and industrial facilities reflecting business activities in the city. Property owners are also facing pressure to upgrade ageing buildings to meet modern standards.
Knight Frank Nigeria’s Senior Partner and Chief Executive Officer, Frank Okosun, noted that investors needed to pay closer attention to location, property demand, operating expenses and the type of assets they intended to acquire.
The findings underscore the economic significance of real estate while highlighting the need for investment decisions that reflect prevailing market conditions. With affordability remaining a major concern, the industry’s ability to respond to changing housing needs will be important to its future performance.
