Nigeria’s property sector is carrying real weight in the economy. Real estate made up 13.10 per cent of real gross domestic product in the first quarter of 2026. Construction grew by 6.38 per cent year-on-year over the same period.
Knight Frank released the figures on Monday in its H1 2026 Lagos Market Update. The firm says rising housing costs, infrastructure spending and choosier tenants are shaping the market in Lagos, Abuja and Port Harcourt.
The wider economy is also calming. Headline inflation dropped to 15.91 per cent in June, from 25.29 per cent a year earlier. Even so, high building costs and poor housing affordability still steer where investors put their money.
Lagos: Rents Climb as Tenants Trade Down
Lagos faces a sharp shortage of formal housing. Rents have responded. In Ikoyi, Victoria Island, Banana Island and Lekki Phase 1, they have more than doubled since 2023.
Many tenants are now looking for cheaper homes on the mainland. Studios, mini-flats and two-bedroom units are in demand.
Transport projects are also changing the map. Rail expansion and upgrades along the Lekki-Epe corridor are opening up suburbs such as Ajah, Sangotedo and Ibeju-Lekki.
Commercial property is doing better in some segments than others. Grade A office rents in Lagos have settled at about $55 per square metre each month. To keep buildings full, landlords are offering fit-out support, concessions and flexible leases.
Industrial Grade A space in Alaro City and the Lagos Free Zone costs $4 to $6.5 per square metre monthly. In retail, shoppers favour convenient neighbourhood formats. Investors are also watching for possible tax changes in Free Trade Zones.
Abuja and Port Harcourt
Abuja saw strong price gains. Capital values in Guzape I and II rose by 20 to 30 per cent. Prime areas like Maitama, Asokoro and Wuse 2 are now crowded, so they are being redeveloped. Diaspora investors and demand for modern offices pushed commercial rents up by more than 10 per cent in the first half of the year.
Port Harcourt’s market still leans on oil and gas. That sector drives demand for modern homes, commercial hubs and industrial sites. It also puts pressure on owners of older commercial buildings to refurbish.
What Industry Leaders Say
Frank Okosun, Senior Partner and CEO of Knight Frank Nigeria, said the market is resilient but increasingly depends on location and asset type. He warned that developers must respond to affordability pressures, running costs and proven demand.
Research Analyst Daniel Fabi said occupiers in all three cities want value and function. Residential demand is splitting between prime and cheaper options, he noted.
Lanre Sonubi, the firm’s Head of Marketing and Corporate Communications, said the report is meant to give clients evidence-based insight as they weigh risk and plan for growth.
