The highly lucrative real estate market has continued to see soaring property prices, with brokers’ activities in short lets, flipping and speculative investments adding pressure to an already strained market and further eroding housing affordability. However, experts differed on the extent of brokers’ influence, with some acknowledging their role in driving prices, while others attributed the increases to higher costs of land, cement, steel, labour, diesel, imported materials, financing, infrastructure and statutory charges, FAVOUR UDEZUE reports.

For decades, traditional estate agents in Nigeria made money by bringing a willing buyer and seller together for a commission. But a new breed of property broker is emerging across Lagos and other major cities, increasingly becoming part of the pricing chain.

Rather than waiting for sellers to hand them properties to market, these brokers scout undervalued houses and plots, negotiate directly with owners, secure agreements, add their margins and look for buyers. Some acquire properties outright and resell them, while others secure control of assets and sell their interests before completing the transactions.

Some specialise in distressed properties, while others target land in emerging locations, off-plan apartments or houses that can be refurbished and repositioned. The model is straightforward: acquire or control an asset at one price and exit at a higher one.

But in a market already grappling with high land prices, rising construction costs, limited housing supply and escalating rents, property professionals and consumers are asking whether these brokers are merely responding to rising prices or adding another layer of inflation.

The transformation is partly driven by the returns available from property appreciation. Under the traditional model, an agent might earn a percentage of a N100 million transaction. Under the new model, a broker who acquires the same property for N85 million and resells it for N100 million could make N15 million before transaction and holding costs. The incentive is therefore not just to close transactions, but to identify assets that can be bought cheaply, controlled and resold at a higher price.

This distinction is becoming important in Lagos, where property values have risen sharply in several locations. The 2026 Lagos Real Estate Industry Report by Agusto & Company estimates that land prices within five kilometres of the Lekki-Epe corridor rose by 25 to 40 per cent between the first quarter of 2025 and the first quarter of 2026. In Ibeju-Lekki, land prices increased from about N15 million per plot in 2024 to as much as N35 million in 2026.

In some areas, the increase has been more dramatic. Data reported on Lagos’ coastal property market showed land values in the Bluewater-Okunde zone rising from about N329,000 per square metre in 2021 to between N2.5 million and N2.8 million in 2026, representing an increase of 660 to 751 per cent. The growth has been linked to major infrastructure and investment projects around the coastline.

Such appreciation attracts speculators, and each transaction can become a reference point for the next asking price. A homeowner may be willing to sell for N100 million, for instance, while an intermediary negotiates the price down to N90 million and resells at N105 million or N110 million. The next buyer may then regard the higher figure as evidence of the property’s market value.

A chain of mark-ups can develop without any corresponding improvement in the property. This is particularly problematic because reliable transaction-price data remain limited. Nigeria does not have a centralised mandatory registry of completed property transactions, while market reports often distinguish between asking prices and actual sale prices.

Short-let apartments have added another dimension to these pressures, particularly in Lagos. A conventional two- or three-bedroom apartment is increasingly being valued not only by what a long-term tenant can afford to pay annually, but also by what it can generate from short-term occupants.

Lagos short-let market generated an estimated N281.03 billion in revenue in 2025, according to the Lagos Short-let Market Report 2025 by Edala Development. Based on 5,806 listings, the report projects revenue of about N285.5 billion for 2026 and found that short-lets can generate returns three to six times higher than conventional residential leases.

Instead of waiting for annual rent, an investor can furnish an apartment and market it on a nightly or weekly basis. For brokers, this creates another selling point: the property is not simply a home but an income-generating hospitality asset. The calculation is influencing property prices in areas such as 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 returns can encourage investors to value apartments according to their short-let potential rather than conventional rental income, creating additional pressure on capital values and rents.

The trend also affects housing supply. Every conventional apartment converted to short-let accommodation potentially removes a unit from the long-term rental market. A June 2026 report by The Guardian cited industry concerns that the conversion of residential properties into short-lets in Lagos and other major cities is contributing to declining conventional rental stock and rising housing costs.

Technology is further changing the brokerage business. Online listing platforms, digital advertising, social media, property mapping and faster access to market information allow brokers to circulate properties to thousands of prospective buyers within hours.

While this has encouraged professionalism, it can also create an impression of scarcity and competition. Brokers can advertise aggressively, circulate properties across WhatsApp groups and social media, generate multiple expressions of interest and create urgency that may encourage buyers to raise their offers.

Registered estate agents differed in their views. While some acknowledged brokers’ influence on rising property prices, others attributed the increases to higher costs of land, cement, steel, labour, diesel, imported materials, financing, infrastructure, and statutory charges.

Vice Chairman, International, Association of Estate Agents in Nigeria (AEAN), Dr Adeniyi Tinubu, said brokers contribute to Lagos’ rapid property-price increases, but are better described as “price amplifiers” than price-setters. He said land scarcity, inflation and exchange-rate pressures remain the underlying forces.

“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,” he said.

Tinubu, who is the Chief Executive Officer of Hudders Field Property Agency, said brokers contribute to price inflation through expectation-driven pricing. Asking prices, he noted, are often based on what neighbouring properties are listed for rather than what they actually sold for, compounded by multiple agency commissions, information gaps between owners and buyers and expectations of future appreciation.

“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.”

He said property flippers have a more direct effect, while land speculation is the strongest inflationary mechanism. Investors who buy land solely in anticipation of appreciation effectively remove it from productive supply while waiting for a higher price.

“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.

Tinubu said buying properties for quick resale, particularly off-plan units and land in emerging areas, can push prices beyond underlying incomes, reduce access for homebuyers, increase unaffordability and distort the rental market.

However, he cautioned against portraying all investors as harmful. Speculative capital can provide early-stage funding for developers, bring neglected land into the formal market, accelerate infrastructure and development, reduce financing risks, improve distressed properties and increase market liquidity.

“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, said speculation can amplify an already rising 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,” he said.

He said the problem becomes more pronounced in emerging corridors where investors buy mainly in anticipation that the next buyer will pay more. When speculation overtakes housing production, genuine homebuyers compete not only with other buyers but also with investors seeking capital appreciation.

Ismail, the Principal Partner, Ismail and Partners, acknowledged that short-lets can reduce conventional rental supply in particular neighbourhoods, but cautioned against attributing Lagos-wide rent increases solely to the 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.'”

He advocated 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,” Ismail 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 rise in property prices largely to the cost of construction materials and general inflation.

He said landlords and developers price properties based on prevailing construction costs, making it difficult to sell at prices charged several years ago.

Adelaja called for lower construction costs and greater government intervention through the development of public housing estates that would be more affordable than privately developed estates.