The Impact of Inflation on Nigerian Property Prices and Rent (2025 Update)

Introduction: Why Your Rent Increased by 50% in One Year

If you rent in Lagos, you’ve felt the pain. My own landlord in Ikeja raised rent from ₦1.5 million to ₦2.5 million in 2024 – a 67% jump. When I asked why, he just said “inflation.” He wasn’t wrong. Nigeria’s inflation rate hit 25.8% in 2024 and has remained above 20% into 2025. But how exactly does inflation affect property prices and rents? And what should you, as a tenant or investor, do about it? I’ll break it down with real numbers and practical advice.

What Is Inflation Doing to Building Materials?

Inflation means the naira in your pocket buys less each month. For property, this starts with construction costs. Between 2022 and 2025:

• Cement: ₦3,500 per bag → ₦5,500 – ₦7,000 per bag (57‑100% increase).

• Iron rods (12mm): ₦200,000 per tonne → ₦450,000 – ₦600,000 per tonne (125% increase).

• Roofing sheets: ₦3,000 per sheet → ₦5,500 per sheet (83% increase).

These increases mean that a new house that cost ₦25 million to build in 2022 now costs over ₦40 million. Developers pass this cost to buyers, pushing up property prices.

How Rising Building Costs Affect Property Prices

In high‑demand areas like Lekki, Ikeja, and Abuja’s Wuse II, property prices have doubled in three years. For example:

• A 3‑bedroom flat in Magodo Phase 2 sold for ₦45 million in 2022; today, similar flats are listed for ₦85‑100 million.

• A plot of land in Kubwa, Abuja was ₦8 million in 2022; now it’s ₦18‑25 million.

But not all areas see the same increase. In quieter towns (like Ilorin, Osogbo), prices have gone up more slowly – maybe 30‑40% – because demand is lower.

The Rent Shock: Why Tenants Are Suffering

Landlords face higher costs too: property tax (Land Use Charge) increased in Lagos by an average of 20% in 2024. Maintenance (painting, plumbing, fixing roofs) now costs 50‑70% more. To stay profitable, landlords raise rents.

Let me give you real examples from my own survey of Lagos rents in early 2025:

In Abuja, similar jumps: Lugbe went from ₦700k to ₦1.3M (86% increase). Tenants who earn fixed salaries are being squeezed hard.

Is Real Estate Still a Good Hedge Against Inflation?

Yes – if you buy at the right time. Historically, Nigerian real estate has outpaced inflation over long periods (10+ years). For example, a property bought in Gwarimpa, Abuja in 2015 for ₦15 million could sell for ₦50‑60 million today – a 300% return, while cumulative inflation over the same period was around 150%. So property beat inflation.

But there’s a catch: the market may correct if inflation goes too high and buyers can’t afford mortgages. In late 2024, I saw some properties in overpriced areas stay on the market for over 12 months – sellers refused to reduce prices, and buyers couldn’t afford. So you need to be selective.

Practical Advice for Tenants Facing Rent Hikes

• Negotiate hard. Landlords expect bargaining. Offer to pay two years upfront for a 20‑30% discount. Many will accept because they need cash for their own expenses.

• Move to developing areas. Instead of paying ₦6M in Ikeja, consider Agbado or Mowe – you can get a similar house for ₦2M and commute longer.

• Consider a roommate or co‑tenancy. Split the rent with a trusted friend.

• Use the TNJC Homes rent vs. buy calculator to see if buying might be cheaper in the long run (link below).

Advice for Investors in an Inflationary Environment

• Buy in areas with strong infrastructure development (new roads, rail, airports). Those areas see demand even when inflation is high.

• Avoid over‑leveraging (borrowing too much). If interest rates rise further (they are already 25‑30% on loans), your mortgage could become unaffordable.

• Consider short‑let (Airbnb) in tourist areas like Lekki Phase 1, Victoria Island, or Abuja’s Wuse 2. Short‑let rates have risen faster than long‑term rents because travellers pay in dollars equivalent.

A Personal Story That Changed My Perspective

In 2024, I was about to sell a property in Ajah because I thought the market had peaked. A friend advised me to hold, saying “inflation will push prices higher.” I kept it. Nine months later, I got an offer 40% above what I would have sold for. That property is now a rental generating ₦2.5M per year – 15% yield on my original purchase. That’s the power of holding through inflation.

Conclusion

Inflation is here to stay for the near future. As a tenant, you need to negotiate smarter and consider relocation. As an investor, don’t panic – quality real estate remains a solid hedge, especially in high‑demand corridors. Use tools like the TNJC Homes property calculator (below) to model different inflation scenarios. And always remember: the best time to buy was yesterday; the second best time is today.

Links:

1. Nigerian Bureau of Statistics – Inflation Report – track official CPI data

2. TNJC Homes Investment Property Calculator – estimate future value under inflation