Why a crash is imminent in Nigeria's real estate bubble
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Nigeria's real estate bubble faces an imminent market correction as construction costs surge 100 percent, rents climb 200 percent, and affordability collapses, analysts warn.
Economic analysts warn that a 100 percent increase in construction costs over the last 24 months and a 200 percent rent increase, especially in city centres, are unsustainable signals that a market correction is looming.
Bismarck Rewane, CEO of Financial Derivatives Company, explained at an August 2026 breakfast session that oversupply from overbuilding in Lagos, Abuja and Port Harcourt, rising delinquency, and mortgage defaults are driving the country toward a crash. The rent-to-income ratio is now about 70 percent, more than double the United Nations 30 percent benchmark.
Cement prices have risen from N7,500 in the last quarter of 2024 and N9,000 in the third quarter of 2025 to between N12,000 and N15,000 presently. Blocks, sand, granite and reinforcement bars have all seen similar spikes, pushing the cost of building a modest house to almost double what it was a few years ago.
Developers are postponing projects, reducing scope, or passing increased costs to buyers. With two-bedroom apartments in Lagos averaging N2.5 million annually, many prospective homeowners are being priced out indefinitely, accelerating a shift from ownership to rental housing that analysts say cannot be sustained.