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15 Things To Know About Real Estate in Nigeria

    Real estate is everywhere. The statement is true.

    The land beneath your feet, the homes people live in, the offices where businesses operate, and the malls where people shop are all part of real estate.

    And that’s right.

    In Nigeria, real estate is one of the most valuable and dynamic sectors of the economy.

    And why did I say so?

    According to the news,

    The National Bureau of Statistics(NBS) recently conducted a rebasing of Nigeria’s GDP.

    Updating the base year to reflect the current economic realities.

    The result?

    The exercise led to a reclassification of various sectors.

    This reveals that real estate now ranks third in terms of GDP contribution.

    After the likes of crop production and trade, which hold the first and second positions, respectively.

    Furthermore, according to NBS, the real estate sector contributed 5.20% to Nigeria’s GDP in the first quarter of 2024.

    Which surpasses the crude petroleum and natural gas sector, which has now fallen to the fifth position.

    These projections highlight a significant transformation in Nigeria’s economic priorities.

    It underscores the importance of continued investment and policy support to sustain and enhance this growth trajectory.

    As you know, real estate serves as an investment vehicle and plays a crucial role in modern development.

    Despite this, some people still see real estate as a complex entity.

    They assume that owning land or property is not always as genuine as it should be.

    However, real estate in Nigeria is complex, and influenced by laws, market trends, government policies, and economic conditions.

    Whether you are an investor, landlord, or developer, understanding these complexities is essential for making informed decisions.

    In this article, we will explore 15 key things you need to know about real estate in Nigeria.

    These insights will help you navigate the industry and avoid costly mistakes.

    Land Ownership in Nigeria is Governed by the Land Use Act(REAL ESTATE)

    If you want to own land in Nigeria, you must understand the Land Use Act of 1978.

    Here is why.

    This law gives state governors control over all land in their respective states.

    Individuals and businesses cannot own land outright; they only have the right to use it for a specified period(usually 99 years).

    To legally acquire land, you must obtain the Governor’s Consent, which is the official approval from the state government.

    Without this, any land transaction is incomplete and could lead to disputes.

    Not All Lands Are Available for Private Ownership

    Some lands in Nigeria are classified as government-acquired.

    This is right…

    These include lands reserved for public projects such as roads, schools, hospitals, and government buildings.

    The good thing is that the Nigerian government classifies such lands into three main categories:

    • Free Land

    This type of land has no government restrictions. It is available for private ownership and can be used for commercial, residential, or agricultural purposes.

    • Government-Acquired Land

    Some lands are designated for public use, such as roads, schools, hospitals, and airports. Buying land under government acquisition is risky because the government can reclaim it at any time without compensation.

    • Excision Land

    When a community successfully applies for land excision, the government releases a portion of land back to them.

    This excised land is recorded in an official Gazette, making it available for private ownership.

    Buying such land without due diligence can result in forfeiture, meaning you lose your investment.

    To avoid this, always search the Land Bureau to confirm the status of the land before purchasing.

    There Are Different Types of Land Titles

    In Nigeria, land ownership is backed by legal documents called land titles.

    The most common ones include:

    • Certificate of Occupancy(C of O): The highest level of ownership recognized by the government.
    • Gazette: A document that records land excision(release) to communities by the government.
    • Excision: The process of releasing land from government control to communities or individuals.
    • Deed of Assignment: A legal agreement transferring land ownership from one party to another.
    • Governor’s Consent: Required when selling land that already has a C of O.

    Without a proper land title, your ownership claim can be challenged.

    Buying Land Without Verification Can Be a Costly Mistake

    Many people fall victim to land scams in Nigeria because they fail to verify the ownership and legal status of the land.

    Some common scams include:

    • Selling land to multiple buyers(Omonile).
    • Selling land under government acquisition.
    • Fake or forged documents.

    How to Verify Land Before Buying

    • Request the Survey Plan – This document shows the exact location and size of the land.
    • Check the Land Registry – Conduct a title search at the state’s Land Bureau.
    • Confirm Land Ownership – Speak to community leaders or local authorities.
    • Engage a Lawyer or real estate professional – Legal professionals can help verify documents and prevent fraud.

    Buying land without verification is one of the biggest mistakes you can make. Always confirm the authenticity of land titles before making any payment.

    Location Determines Land Value

    In real estate, location is everything.

    The value of land in Lagos, Abuja, or Port Harcourt is significantly higher than in rural areas.

    Even within a city, land prices vary based on factors such as:

    • Proximity to commercial centers
    • Access to good roads and infrastructure
    • Future development plans
    • Security and social amenities

    Investing in a prime location guarantees better capital appreciation and rental income.

    Real Estate is One of the Best Investment Vehicles

    Unlike other investments such as stocks or cryptocurrency, real estate is a tangible asset that rarely loses value over time.

    It offers:

    • Capital appreciation – Land value increases over time.
    • Passive income – Rental properties provide steady cash flow.
    • Inflation hedge – As prices rise, property values and rent also increase.

    However, real estate requires long-term planning, and liquidity is lower compared to other investments.

    Real Estate Transactions Require Legal Agreements

    Every land or property transaction in Nigeria should be backed by a legal agreement to prevent future disputes.

    Essential documents include:

    • Sales Agreement – Outlines terms and conditions of sale.
    • Deed of Assignment – Transfers ownership from seller to buyer.
    • Survey Plan – Defines the boundaries of the land.
    • Governor’s Consent – Validates land transactions legally.

    Without these documents, your ownership claim can be challenged.

    Developers Play a Big Role in Nigeria’s Real Estate Market

    Due to urbanization and housing demand, real estate developers have emerged as key players.

    They build and sell:

    • Residential estates(flats, duplexes, bungalows)
    • Commercial buildings(offices, malls, hotels)
    • Gated communities with modern infrastructure

    However, not all developers are trustworthy. Always verify their track record before investing in any project.

    Mortgage Financing is Available, But Not Easily Accessible

    In developed countries, mortgages make owning a home easy.

    In Nigeria, mortgage loans exist but are difficult to access due to:

    • High-interest rates(15% – 25%)
    • Strict eligibility criteria
    • Long approval process

    Most Nigerians prefer installment payment plans from developers or cooperative societies.

    Rental Income is a Strong Investment Strategy

    Owning rental properties is one of the best ways to generate passive income.

    In major cities like Lagos and Abuja, rental demand is high.

    Before investing in rental properties, consider:

    • Location and demand
    • Maintenance costs
    • Tenant management

    Real Estate Prices Are Affected by Government Policies

    Policies such as taxation, land regulations, and infrastructure development influence real estate prices.

    Government decisions on housing schemes, foreign investments, and economic reforms also shape the market.

    Property Taxation Exists in Nigeria

    Property owners in Nigeria are required to pay taxes such as:

    • Land Use Charge – A tax on property owners for using land.
    • Capital Gains Tax – Paid when selling a property at a profit.
    • Tenement Rate – Paid by landlords on rental properties.

    Failure to pay taxes can lead to legal action by the government.

    Urbanization is Driving Real Estate Growth

    Nigeria’s growing population and urban migration are increasing the demand for housing.

    The fastest-growing real estate markets include:

    • Lagos(Victoria Island, Lekki, Ibeju Lekki, Epe and Ikeja)
    • Abuja(Maitama, Wuse, Gwarinpa)
    • Port Harcourt(GRA, Trans-Amadi)

    Understanding these trends helps investors choose profitable locations.

    Buying Off-Plan Properties Can Be Risky

    Off-plan properties are houses sold before construction is completed.

    They offer lower prices but come with risks such as delayed projects, fraud, and poor construction quality.

    To get it right, always verify the developer’s credibility before investing.

    Real Estate is a Long-Term Wealth-Building Strategy

    Unlike quick-profit schemes, real estate builds wealth over decades.

    Successful investors buy strategically, hold properties, and reinvest profits for long-term growth.

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