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  As of the time of this article’s publication, the Nigerian economy is reeling from the impact of a protracted inflationary trend. Prices have risen across the board, and every naira is worth far less than it was just months ago. Investors, including those who have staked some funds on real estate, are worried that the real value of their investments is falling.
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Given this reality, you may ask: is now a good time to invest in real estate in Nigeria? This is a pertinent question, whether it’s posed by investors in the diaspora who wonder about the worth of their holdings in dollars, or by people in Nigeria who are concerned about inflation’s value-destroying effects. We set out to answer this question in this article.

For Nigerians Living in the Diaspora

If you earn in foreign currency (dollars, pounds, euros, etc.) and would like to invest in Nigeria’s real estate market, you’re better off investing for the long term. Here’s why: short-term investments are subject to the vagaries of exchange rates. If you go for the short term, you may wind up making only a meagre profit or even losing significant amounts of money, concerning the currency of your country of residence.
  • What You Should Do: Invest for the long-term. When you pick a location (or locations) with great promise for the future, they’re likely to erase whatever losses you may have made in the short term. That will happen partly due to the perennially high demand for property in Nigeria, driven by a rapidly growing population. “Long term” here means more than 5 years; the specific length of time involved will depend on the peculiarities of the locations you invest in.
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For Investors Living in Nigeria

The advice we’ll give to people in Nigeria is slightly different from what we’ve said above. You probably aren’t earning in dollars or pounds, so your most immediate concern is not the exchange rate, but inflation. Whatever move you make has to take this into account.
  • What You Should Do: We’d say that your approach to investing in real estate in Nigeria right now should depend on where you’re investing. You can afford to target handsome returns for the short term if the properties you’re investing in are in very high demand, or are sought after by people and organizations in the high-income bracket—for example, in the exclusive neighbourhoods of Lagos and Abuja. If your investments are in land or property in average markets, you should be digging in your heels for the long term.

A Few Words about the Nigerian Real Estate Market

Persons who have watched the Nigerian real estate market for years or decades will tell you that it’s rarely a bad time to invest in real estate here. Individuals, families and corporate entities that are held back from investing due to prevailing economic conditions have typically ended up regretting their hesitation. Despite the multiple episodes of economic trouble that Nigeria has faced, its real estate industry has always emerged stronger and livelier.
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Final Words

Is now the time to invest in real estate in Nigeria? Our answer is yes, at least for much of the country. What should vary is your approach to investing: long-term if you’re abroad and a mix of the short and long-term if you’re in Nigeria. Just be sure to weigh the peculiar details of the options available to you before making a decision. Featured Image Source: iHome NG
Got a suggestion? Contact us: editor@connectnigeria.com
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This article was first published on 24th November 2023

ikenna-nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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