Written by Tomiwa Odetayo
Real estate is sometimes a myth to people who don’t understand what drives its growth. In economics, they teach you that rent is the reward or return for the use of land. Land is considered one of the factors of production.
How about a dormant land in a suburban area? How does growth suddenly occur on that property? Today, it is worth less than half a million Naira, and in two years, it will be selling for triple that. Last year, I attended a real estate conference in Ibadan featuring notable industry experts, and one major topic stood out: What truly drives Property Value?
While many factors influence land appreciation, I wrote down three key elements that work together to determine how much your property will be worth in the coming years. If you’re an investor or aspiring homeowner, these are non-negotiable factors you must pay attention to. Let’s get into it.
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1. Development
You may have heard many times that development is the game-changer on most properties. Let’s use an example:
“Bro Yemi, do you know the government has started building a farm factory in that location we saw last month?”
This is how property value skyrockets—through development. Whether it’s a government-backed project, private estates, or commercial infrastructure, development transforms a location from ‘bush’ to ‘prime land’.
For instance, Ibeju-Lekki in Lagos was once considered an overlooked area. But with the construction of the Dangote Refinery, Lekki Deep Seaport, and Free Trade Zone, land prices jumped from as low as ₦500,000 in 2015 to over ₦10 million in 2024.
The same applies to areas in Ibadan, like Moniya, where the Dry Inland Port project significantly increased land value. Development is the signal that an area is about to boom, and smart investors always buy before the news goes mainstream.
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Your next move:
- Research upcoming government and private projects.
- Buy land in areas with announced development plans, not just existing ones.
- Check for road expansion projects, commercial hubs, or industrial zones—these drive demand.
2. Currency
Even in the days when the Naira was more stable against the dollar, land prices still increased. So, what happens when the Naira keeps losing value? Real estate becomes the safest way to store wealth.
Between 2020 and 2024, the Naira depreciated by over 150%, but land in prime locations appreciated by over 300% in the same period.
For example, if you had ₦10 million in savings in 2020, its value today would be significantly lower due to inflation. But if you had invested that ₦10 million in land in places like Epe or Abeokuta, your property value would have more than tripled by now.
Real estate doesn’t depreciate with currency fluctuations—it protects your wealth.
Your next move:
- Instead of holding too much cash in naira, convert it into real estate assets.
- Buy land in locations where demand will outpace supply in the coming years.
- Think long-term—real estate is a hedge against inflation.
3. Time
They say time heals all wounds, but in real estate, time is the wealth builder. The future is always cheaper today than it will be tomorrow. Let’s go back 10 years. In 2014, land in Ajah was selling for around ₦2.5 million. Fast forward to 2024, and that same land is now worth over ₦50 million.
Why? Time; The earth is not getting bigger, but the population keeps growing. More people need land, but the supply is limited. The longer you wait, the more expensive it becomes.
Your next move:
- Don’t delay buying real estate. The best time to buy was yesterday, the next best time is today.
- Understand that long-term holding equals higher returns.
- Even if you’re not ready to build, buying land now locks in today’s price.
Final Thoughts
Real estate is one of the few investments where waiting rewards you. If you’re considering buying a property in Lagos, Ibadan, or any strategic location, you mustn’t neglect the driving factors as a smart investor.
In the coming decades, the idea of development, currency, and time in real estate will still be valid. They may affect your property in different manners, but they work hand-in-hand to increase your return on investment.
Do you have a personal experience of how the value of real estate grew in a location you know? Share your thoughts in the comment box.
