Property prices in Lagos are being pushed by a combination of rising development costs, limited housing supply and growing speculative activity, with some property brokers now playing a bigger role in the pricing chain.
For decades, estate agents in Nigeria mainly connected buyers with sellers and earned commissions from completed transactions. However, a new group of property brokers is increasingly taking a more active role by finding undervalued properties, negotiating directly with owners and reselling them at higher prices.
The trend has become more noticeable in Lagos, where land values, rents and construction costs have continued to rise. However, property professionals disagree on how much brokers and speculators are responsible for the increases.
While some experts say brokers can amplify prices, others point to higher costs of land, cement, steel, labour, diesel, imported materials, financing, infrastructure and statutory charges as the main drivers.
Brokers move beyond traditional estate agency
Under the traditional estate agency model, an agent helps bring a willing buyer and seller together and receives a commission.
The emerging brokerage model works differently.
Some brokers now search for properties they believe are undervalued. They negotiate with owners, secure agreements, add their margins and search for buyers.
Others purchase properties outright before reselling them. Some secure control of properties and sell their interests before completing the underlying transactions.
The strategy is also being applied to different types of property. Some brokers focus on distressed properties, while others target land in developing areas, off-plan apartments and houses that can be renovated and repositioned.
The basic business model is to acquire or control an asset at one price and exit at a higher price.
The financial incentive can be significant. For instance, a traditional agent handling a N100 million property may earn a percentage as commission. A broker who acquires the same property for N85 million and sells it for N100 million could make N15 million before transaction and holding costs.
This means the motivation is no longer only to complete a transaction. It is also to identify properties that can be bought or controlled cheaply and resold for profit.
Rising land values create room for speculation
The changing brokerage model comes as property values continue to increase across several parts of Lagos.
The 2026 Lagos Real Estate Industry Report by Agusto & Company found that land prices within five kilometres of the Lekki-Epe corridor increased by 25 to 40 per cent between the first quarter of 2025 and the first quarter of 2026.
In Ibeju-Lekki, land prices reportedly moved from about N15 million per plot in 2024 to as much as N35 million in 2026.
The increase has been even sharper in some coastal locations.
Data on the Lagos coastal property market showed that land values in the Bluewater-Okunde area rose from about N329,000 per square metre in 2021 to between N2.5 million and N2.8 million in 2026.
That represents an increase of about 660 to 751 per cent. The rise has been linked to infrastructure and investment projects around the Lagos coastline.
Such increases can attract more speculative investors. A property owner may accept N100 million, for example, after an intermediary negotiates the price down to N90 million. The intermediary could then resell it for N105 million or N110 million.
The higher resale price can subsequently become a reference point for the next seller or buyer.
This can create a cycle of mark-ups even when there has been no physical improvement to the property.
Lack of transaction data complicates the market
One major challenge is the limited availability of reliable property transaction data in Nigeria.
There is no centralised mandatory registry covering completed property transactions. As a result, market reports often have to distinguish between asking prices and actual transaction prices.
This distinction is important because a property advertised for N150 million may not necessarily sell for that amount.
According to Dr Adeniyi Tinubu, Vice Chairman, International, Association of Estate Agents in Nigeria (AEAN), brokers are better described as “price amplifiers” rather than price-setters.
Tinubu, who is also Chief Executive Officer of Hudders Field Property Agency, said land scarcity, inflation and exchange-rate pressures remain major forces behind rising property values.
He said asking prices are often influenced by neighbouring properties listed for sale rather than confirmed transaction prices. Multiple agency commissions, information gaps and expectations of future appreciation can add further pressure.
Tinubu also identified speculative land holding as a major concern.
According to him, investors who buy land only because they expect its value to rise can keep land out of productive use while waiting for a higher resale price.
He said this can make anticipated future prices become the basis for current asking prices instead of rental income, replacement costs and genuine end-user demand.
Short-lets create another layer of pressure
Short-let apartments are also changing how some Lagos properties are valued.
A two- or three-bedroom apartment may now be assessed not only according to what a conventional tenant can pay annually but also according to the income it can generate from short-term occupants.
The Lagos Short-let Market Report 2025 by Edala Development estimated that the sector generated N281.03 billion in revenue in 2025.
Based on 5,806 listings, the report projected revenue of about N285.5 billion for 2026. It also found that short-let properties could generate returns three to six times higher than conventional residential leases.
In Banana Island, the average short-let rate reportedly reached about N329,000 per night in 2025.
This has encouraged some investors to view apartments as income-generating hospitality assets rather than conventional residential properties.
The effect is being felt in areas including Lekki, Victoria Island, Ikoyi, Ikeja, Yaba and Surulere.
However, the growth of short-lets also raises concerns about housing supply. When conventional apartments are converted into short-let accommodation, fewer units remain available for long-term tenants.
A June 2026 report cited industry concerns that this conversion is contributing to declining conventional rental stock and higher housing costs in Lagos and other major cities.
Olugbenga Ismail, National Chairman of AEAN and Principal Partner at Ismail and Partners, acknowledged that short-lets can reduce conventional rental supply in some neighbourhoods.
However, he cautioned against blaming Lagos-wide rent increases on short-lets without stronger evidence. He noted that landlords may also convert properties because of higher potential returns and different tenancy risks.
Technology is changing property brokerage
Technology has also made it easier for brokers to operate.
Online listing platforms, social media, digital advertising, property mapping and faster access to market information allow properties to reach thousands of potential buyers within hours.
While these tools can improve professionalism and market access, they can also create a stronger perception of scarcity.
Properties can be repeatedly circulated through WhatsApp groups and social media, generating multiple expressions of interest and creating urgency among prospective buyers.
This may encourage some buyers to increase their offers.
Experts call for more housing supply
Tinubu said speculative investment should not automatically be treated as harmful.
He distinguished between productive investment and purely extractive speculation.
An investor who buys an off-plan property, develops it or rents it out contributes to housing supply. By contrast, an investor who holds scarce land without developing it and later sells at a large markup contributes less to housing supply while potentially increasing acquisition costs for the eventual user.
Ismail similarly said repeated resale without development or value addition can introduce additional profit expectations into property prices.
He noted that this becomes more serious in emerging areas where investors purchase mainly because they expect another buyer to pay more.
When speculation grows faster than housing production, genuine homebuyers are competing against investors seeking capital appreciation.
However, Ismail said the answer is not simply to stop people from making profits from property. He called instead for increased housing supply, better data, stronger professional standards and a more transparent property market.
He said Lagos needs enough properly titled, serviced and appropriately priced housing to meet demand.
Construction costs remain a major factor
Abiodun Adelaja, Chairman of the Lagos State Chapter of AEAN, attributed much of the steady increase in property prices to construction costs and general inflation.
He explained that developers and landlords consider prevailing construction costs when setting property prices. As a result, it becomes difficult to sell or rent properties at prices from several years ago.
Adelaja called for measures to reduce construction costs and greater government intervention through public housing estates that can provide more affordable alternatives to privately developed housing.
The debate over property prices therefore extends beyond brokers.
Lagos is dealing with rising land values, expensive construction materials, limited housing supply, short-let conversions, financing pressures and speculative investment.
Brokers and investors can influence prices, particularly when properties are repeatedly resold at higher asking prices. However, the views of industry professionals indicate that these activities operate alongside wider economic and supply-side pressures.
For the average homebuyer and tenant, the bigger issue remains affordability.
As Lagos continues to attract residents, businesses and investors, the availability of properly titled, serviced and reasonably priced housing will remain central to the city’s property market.