Land prices in Ikoyi have risen to about N6 million per square metre from between N1.8 million and N2 million three to four years ago, according to Olukayode Olusanya, founder and CEO of Oak Holdings, who questioned the economic basis for the increase.
Olusanya made the comment during the latest Drinks & Mics episode themed “Cars, Homes & Wahala: Why Is the Nigerian Dream So Expensive?”
He said property prices in Banana Island and Ikoyi can rise sharply as individual sellers set higher prices, and completed transactions then create new market benchmarks.
Olusanya said land prices in Ikoyi have risen about threefold in the past three to four years, from between N1.8 million and N2 million per square metre to about N6 million per square metre. He argued that there is no clear science backing the increase, as the process can begin with an individual property owner deciding that their land should command a higher price.
He said the process starts from areas such as Banana Island, where a property owner can decide how much they want to sell their property for and put it on the market at that price.
When another buyer agrees to pay the higher price, the completed transaction becomes a reference point for other sellers, effectively creating a new benchmark for the market.
Another expert in the real estate industry disagreed with Olusanya’s position, arguing that the pricing of real estate is governed by economic principles, including the law of demand. Sanni Faruq, Lead Consultant at Senior Homes and Properties, said the existence of a willing buyer and a willing seller at an agreed price means the transaction is already being determined by market forces.
Faruq argued that the broader Lagos real estate market is being driven by strong demand alongside limited supply, creating sustained upward pressure on property prices.
The sharp rise in land prices in Lagos’ prime neighbourhoods is reflected in the city’s position as the second-most expensive market for prime residential land in Africa, with US$1 million buying about 507 square metres, according to Estate Intel.
The report also noted that developers of luxury residential projects are competing for a limited number of prime sites, while strong sales, occupancy and profit margins have encouraged further land acquisition.
Lagos has a significant gap between prime land values and local purchasing power, with average prime land prices exceeding US$1,900 per square metre.
Across the 11 cities surveyed, Johannesburg was the most affordable, with US$1 million buying about 4,537 square metres, compared with 507 square metres in Lagos. The figures are based on prevailing prices in selected prime residential locations and do not represent typical plot sizes across the respective cities.
While property prices in Lagos’ prime neighbourhoods have continued to rise, high prices do not necessarily translate into better public infrastructure or services for residents, according to the State of Lagos Housing Market Report 2025 Vol. 3.
The report identified Ikoyi, Banana Island, Victoria Island and Lekki Phase 1 as high-end neighbourhoods where residents still contend with unreliable water supply and frequent power outages.
The report identified inadequate drainage and poor waste management as persistent challenges in some of these areas. Many residents rely on private boreholes, water tankers and diesel generators to compensate for gaps in public services.
The report described the situation as a “premium for dysfunction”, with residents paying high property prices while also bearing the cost of private alternatives to basic public services.
