Property Brokers Face Scrutiny as Rising Markups Push House Prices Higher
Nigeria’s real estate market continues to record soaring property prices, with activities by brokers in short-let apartments, property flipping and speculative investments adding pressure to an already strained market and further weakening housing affordability.
However, experts have differing views on how much influence brokers have over rising prices. While some acknowledge that brokers play a role in pushing prices higher, others point to increasing costs of land, cement, steel, labour, diesel, imported materials, financing, infrastructure and statutory charges as the major factors behind the increases.
For decades, traditional estate agents in Nigeria earned commissions by connecting willing buyers with sellers. But a new category of property brokers is increasingly emerging across Lagos and other major cities, becoming more involved in the property pricing process.
Rather than waiting for property owners to give them houses or plots to market, these brokers search for properties they believe are undervalued, negotiate directly with owners, secure agreements, add their own margins and then look for buyers.
Some acquire properties outright and resell them, while others secure control of properties and sell their interests before the transactions are completed.
Some brokers specialise in distressed properties, while others focus on land in emerging locations, off-plan apartments or houses that can be renovated and repositioned for a higher value.
The business model is straightforward: acquire or control a property at one price and sell or exit at a higher price.
The practice is attracting greater attention as Nigeria’s property market deals with high land prices, rising construction costs, limited housing supply and increasing rents. This has raised questions among property professionals and consumers about whether brokers are simply responding to rising prices or adding another layer of inflation to the market.
The growing interest in this model is partly driven by the returns available from property appreciation. Under the traditional agency model, an estate agent could earn a percentage of a N100 million transaction as commission.
Under the newer brokerage model, a broker who acquires the same property for N85 million and resells it for N100 million could potentially make N15 million before accounting for transaction and holding costs.
This means the incentive is no longer limited to completing transactions. Brokers also have an incentive to identify properties that can be acquired cheaply, controlled and resold at a higher price.
The distinction is becoming more significant in Lagos, where property values have increased sharply in several locations.
The 2026 Lagos Real Estate Industry Report by Agusto & Company estimated that land prices within five kilometres of the Lekki-Epe corridor increased by between 25 and 40 per cent from the first quarter of 2025 to the first quarter of 2026.
In Ibeju-Lekki, land prices reportedly rose from about N15 million per plot in 2024 to as much as N35 million in 2026.
Some locations have recorded even more dramatic increases.
Data from Lagos’ coastal property market showed that land values in the Bluewater-Okunde area increased from approximately N329,000 per square metre in 2021 to between N2.5 million and N2.8 million in 2026. That represents an increase of between 660 and 751 per cent, with the growth linked to major infrastructure and investment projects around the coastline.
Such appreciation can attract speculators, while each transaction may subsequently become a reference point for the next asking price.
For example, a homeowner may be willing to sell a property for N100 million, while an intermediary negotiates the price down to N90 million and subsequently resells it for N105 million or N110 million.
The next buyer may then use the higher resale figure as an indication of the property’s market value.
This can create a chain of mark-ups even when there has been no improvement or development on the property.
The situation is further complicated by limited reliable data on actual property transaction prices. Nigeria does not have a centralised mandatory registry for completed property transactions, while market reports often make a distinction between asking prices and the prices at which properties are actually sold.
Short-lets add another layer
Short-let apartments have introduced another dimension to the pressure on property prices, particularly in Lagos.
A conventional two- or three-bedroom apartment is increasingly being valued not only according to what a long-term tenant can afford to pay annually, but also according to the income it could generate from short-term occupants.
According to the Lagos Short-let Market Report 2025 by Edala Development, the Lagos short-let market generated an estimated N281.03 billion in revenue in 2025.
The report was based on 5,806 listings and projected revenue of approximately N285.5 billion for 2026. It also found that short-let properties can generate returns between three and six times higher than conventional residential leases.
Instead of relying on annual rent, an investor can furnish an apartment and market it for nightly or weekly stays.
For brokers, this provides another selling point because the property can be presented not simply as a home, but as an income-generating hospitality asset.
The calculation is influencing property values in areas including Lekki, Victoria Island, Ikoyi, Ikeja, Yaba and Surulere.
In Banana Island, the average short-let rate reportedly reached about N329,000 per night in 2025.
Such potential returns can encourage investors to value apartments based on their short-let earning capacity rather than conventional rental income, creating additional pressure on both property values and rents.
The growth of short-lets also has implications for housing supply.
Every conventional apartment converted into short-let accommodation potentially removes a unit from the long-term rental market.
A June 2026 report by The Guardian cited concerns from industry stakeholders that the conversion of residential properties into short-lets in Lagos and other major cities is contributing to the decline in conventional rental stock and rising housing costs.
Technology changes the brokerage market
Technology is also transforming the way property brokers operate.
Online listing platforms, digital advertising, social media, property mapping tools and faster access to market information allow brokers to circulate properties to thousands of prospective buyers within a short period.
While these tools can encourage greater professionalism in the sector, they can also create perceptions of scarcity and competition.
Brokers can advertise properties aggressively, circulate listings through WhatsApp groups and social media, generate multiple expressions of interest and create a sense of urgency that may encourage prospective buyers to increase their offers.
Registered estate agents, however, have differing views about the extent of brokers’ influence on property prices.
While some acknowledge that brokers contribute to rising prices, others attribute the increases largely to the rising costs of land, cement, steel, labour, diesel, imported materials, financing, infrastructure and statutory charges.
Vice Chairman, International, of the Association of Estate Agents in Nigeria (AEAN), Dr Adeniyi Tinubu, said brokers contribute to the rapid increase in Lagos property prices but described them more as “price amplifiers” than price-setters.
According to him, land scarcity, inflation and exchange-rate pressures remain the fundamental forces behind the market’s price increases.
“Property brokers, flippers and speculative investors are not simply passive observers of Lagos’ property boom. They can actively accelerate it. But they operate on top of powerful fundamental forces rather than creating the entire increase themselves,” Tinubu said.
Tinubu, who is also the Chief Executive Officer of Hudders Field Property Agency, said brokers contribute to property price inflation through expectation-driven pricing.
He explained that asking prices are often based on the prices at which neighbouring properties are listed rather than what those properties actually sold for.
He also pointed to multiple agency commissions, information gaps between property owners and buyers, and expectations of future appreciation as factors contributing to the trend.
“This creates an important distinction between asking prices and transaction prices,” he said.
“A market can appear to be appreciating rapidly because advertised prices are repeatedly marked upward, even when actual completed transactions have not increased by the same magnitude.”
Tinubu said property flippers have a more direct impact on prices, while land speculation represents the strongest inflationary mechanism.
According to him, investors who purchase land solely in anticipation of future appreciation effectively remove the land from productive supply while waiting for its value to increase.
“The more concerning phenomenon is speculative land holding combined with aggressive asking-price benchmarking. It can create a market in which anticipated future prices become the basis for today’s prices, rather than today’s prices being determined primarily by rental income, replacement cost and genuine end-user demand,” he said.
He added that buying properties for quick resale, particularly off-plan units and land in emerging areas, could push prices beyond underlying incomes, reduce access to homeownership, increase unaffordability and distort the rental market.
However, Tinubu cautioned against viewing every property investor as harmful.
He noted that speculative capital can provide early-stage funding for developers, help bring neglected land into the formal market, accelerate infrastructure and development, reduce financing risks, improve distressed properties and increase liquidity in the market.
“The critical distinction is between productive investment and purely extractive speculation,” he said.
“An investor who buys off-plan, holds the property, rents it out or develops it contributes to housing supply. An investor who simply buys scarce land, does nothing with it and resells it at a substantial markup contributes much less to housing supply while potentially increasing the acquisition cost for the eventual user.”
The National Chairman of AEAN, Olugbenga Ismail, also said speculation can amplify an already rising property market.
“Where properties and plots are repeatedly resold over short periods without any corresponding improvement, development or value addition, each transaction may introduce another layer of expected profit,” Ismail said.
He explained that the issue becomes more pronounced in emerging areas where investors buy properties largely on the expectation that another buyer will later pay more.
When speculation begins to outpace housing production, genuine homebuyers have to compete not only with other prospective homeowners but also with investors seeking capital appreciation.
Ismail, who is Principal Partner at Ismail and Partners, acknowledged that short-lets can reduce conventional rental supply in particular neighbourhoods.
However, he cautioned against attributing rent increases across Lagos entirely to the short-let sector without stronger empirical evidence.
“There is also evidence that landlords and investors have converted conventional rental accommodation into short-lets because of potentially higher returns and different tenancy-risk considerations,” he said.
“But the evidence is more nuanced than simply saying, ‘short-lets are increasing everywhere and therefore rents are rising.’”
Ismail called for greater transparency, professionalism and increased housing supply rather than direct price controls.
“The ultimate solution to housing affordability is not simply stopping somebody from selling property at a profit. It is ensuring that Lagos continually produces enough properly titled, serviced and appropriately priced housing to meet demand,” he said.
“Our long-term goal must therefore be greater supply, better data, stronger professional standards and a more transparent property market,” he added.
The Chairman of the Lagos State Chapter of AEAN, Abiodun Adelaja, attributed the steady increase in property prices largely to the rising cost of construction materials and general inflation.
He said landlords and developers determine property prices based on prevailing construction costs, making it difficult for them to sell properties at prices comparable to those charged several years ago.
Adelaja called for measures to reduce construction costs and greater government intervention through the development of public housing estates that would provide more affordable alternatives to privately developed estates.
