“Lagos Real Estate Is Ridiculous” Part One: What You Are Actually Paying For

Part one of a two-part article by Collins Joseph Oni, PMP, Senior Investment Advisor at Fountain Havens Nigeria Limited.

There is a question I believe anyone who has tried to buy property in Lagos has either asked aloud or thought about privately.

“Why is this property so expensive?”

Sometimes, the reaction is even stronger.

“₦500 million for an apartment? What exactly are we paying for?”

And honestly, I understand the frustration.

For many people, buying a home in Lagos has become an increasingly difficult financial undertaking. For investors, the challenge is different but equally important. Prices are high, capital is expensive, and committing hundreds of millions of naira to an asset requires more than the assurance that property always appreciates.

Yet, from the perspective of someone who works closely with property buyers and investors, I believe there is a more interesting conversation to have.

Is Lagos real estate genuinely overpriced, or are we dealing with a market whose prices reflect a complicated combination of land scarcity, construction costs, demand, financing and expectations about the future?

The honest answer is that both situations can exist at the same time.

Some prices have sound economic reasons behind them. Others deserve to be questioned. And in some cases, the price being advertised tells us more about what a seller hopes to receive than what a buyer should reasonably pay.

To understand the Lagos property market, we need to look beyond the price tag.

First, Let Us Talk About the Numbers

According to Nigeria Property Centre’s Q4 2026 market report, the median asking price for property in Lagos was ₦350 million. Its reported median asking price for flats was ₦250 million, while houses stood at ₦350 million. These figures were based on property listings, not a complete record of final transaction prices.

That distinction matters.

A median asking price is not the same as the average amount buyers actually pay. It tells us what properties are being advertised for, but it does not establish that every property will sell at that price.

Nevertheless, the figures illustrate the scale of the market and why affordability has become such an important issue.

Consider what ₦350 million means to an ordinary professional or business owner. Even someone earning a substantial income may struggle to purchase a property at that price without years of accumulated wealth, access to significant financing or proceeds from another investment.

This raises a fundamental question: if so many people cannot afford these prices, who is buying the properties?

The answer helps explain why the Lagos market cannot be understood through one simple narrative.

Different locations serve different buyers. Some properties target owner occupiers. Others appeal to high net worth individuals, corporate tenants, diaspora investors or people seeking to preserve substantial capital. Some developments are designed around rental income, while others depend more heavily on expectations of future appreciation.

The demand for a ₦100 million apartment is not necessarily the same as the demand for a ₦1 billion residence in Ikoyi.

Treating these properties as though they belong to one uniform market leads to poor conclusions.

The Cost of Building Has Changed the Conversation

One reason property prices have risen is that developing property has become considerably more expensive.

Land is only the beginning.

A developer must account for construction materials, labour, professional fees, statutory charges, infrastructure, power systems, lifts, water supply, security, financing, marketing and other project expenses.

In premium developments, specifications can make a substantial difference.

A building with multiple lifts, backup power, advanced security, high quality finishes, parking, recreational facilities and centralised services will not cost the same to deliver as a basic residential building of comparable size.

Reporting by Nairametrics in August 2026 highlighted significant increases in construction inputs. Industry participants cited cement prices of approximately ₦12,500 to ₦15,000 per bag, compared with around ₦5,000 to ₦6,000 at the end of 2023. Reinforcement steel and other building materials had also become more expensive.

These increases help explain the pressure on development budgets.

However, there is an important qualification.

Higher construction costs can explain why a property is expensive to produce. They do not automatically prove that buyers should pay whatever price the developer chooses.

The market still determines whether the finished product offers sufficient value at the proposed price.

A developer can spend more than anticipated and still struggle to sell if the final price exceeds what the target market can afford or justify.

That is why cost analysis and market analysis must work together.

Land Is Expensive, but Location Is Not a Blank Cheque

In Lagos, the cost of land can significantly influence the final price of a property.

Prime locations such as Ikoyi, Victoria Island and parts of Lekki attract buyers because of their access to commercial districts, established residential communities, business activity, infrastructure and lifestyle amenities.

In some areas, suitable development sites are limited. Acquiring land, resolving title issues, obtaining approvals and preparing a site for construction can also add substantial costs and time.

These factors help explain why a property in one neighbourhood may cost several times more than a superficially similar property elsewhere.

But I believe location is one of the areas where buyers must be particularly careful.

The name of a neighbourhood should not, by itself, justify any price.

Two developments within the same area can have different values because of their accessibility, views, design, building management, quality, surrounding environment and appeal to future buyers.

Even two apartments in the same building may command different prices depending on their floor, orientation, layout and other features.

The important question is not simply whether the property is in Ikoyi, Victoria Island or Lekki.

It is whether the specific property offers enough advantages to justify its price relative to comparable alternatives.

A prestigious address can support a premium. It cannot excuse the absence of value.

Are We Paying for the Property or the Promise?

This is where the conversation becomes particularly interesting.

In real estate, a buyer is sometimes paying not only for what exists today but also for what the property is expected to become.

A developing corridor may attract investors because of planned infrastructure, new commercial activity or anticipated population growth. An off plan development may be priced on the expectation that its completed value will exceed its current purchase price.

These expectations can create genuine investment opportunities.

They can also create unrealistic prices.

Suppose a buyer is offered an apartment for ₦300 million because the seller believes it will be worth ₦400 million upon completion.

That future valuation is not a guaranteed return.

The buyer needs to understand what supports the projected ₦400 million value. Are comparable completed properties actually selling at that level? Is demand strong enough to absorb the expected supply? Does the development have a credible delivery programme? Are construction costs, payment terms and the time value of money properly considered?

Without satisfactory answers, the projected appreciation remains an assumption.

I have always believed that investors should distinguish between what a property is worth today and what someone expects it to be worth tomorrow.

The difference between those two figures is where both opportunity and risk can be found.

Continue reading: Part two, “Is the Price Justified?” examines whether some Lagos properties really are overpriced, why a high price is not the same thing as a bubble, and the five checks every serious buyer should run before committing capital.