Valuation Challenges in Nigeria's Urban Real Estate Market

The real estate sector in Nigeria’s urban centres is dynamic and fast-evolving, driven by population growth, infrastructural expansion, and increasing demand for residential, commercial, and mixed-use spaces. However, amidst this growth lies a range of valuation challenges that complicate property pricing and investment decisions in cities like Lagos, Abuja, and Port Harcourt.

This article explores key valuation challenges in Nigeria's urban real estate market and how they affect the accuracy and reliability of property valuation.

1. Incomplete or Inaccurate Property Records

One of the biggest obstacles to accurate property valuation in Nigerian cities is the lack of comprehensive property databases. In many urban areas:

Records are manually stored or outdated

There is limited access to reliable comparable sales data

Title and ownership records are often unclear or inconsistent

This makes it difficult for valuers to access the historical data needed to apply the comparative (sales) approach, one of the most commonly used valuation methods.

2. Documentation and Title Issues

Urban properties are frequently entangled in title problems:

Overlapping claims on the same land

Missing documents like Certificates of Occupancy (C of O) or Governor’s Consent

Ambiguous land use classifications

These issues create uncertainty, reduce buyer confidence, and ultimately affect property value.

3. Rapid and Uncontrolled Urbanization

Cities like Lagos and Abuja are expanding rapidly, but often without adequate urban planning or enforcement of zoning laws. This leads to:

Informal developments and slums

Poor road and drainage infrastructure

Environmental concerns like flooding

All of these factors can lower property desirability, but they’re often not captured accurately in valuations, especially when there’s pressure to overstate values for loan or sales purposes.

4. Market Volatility and Speculation

Urban real estate markets in Nigeria are sometimes driven by speculation, leading to:

Inflated asking prices

Sudden price changes unrelated to actual demand

Mismatch between market value and what buyers are willing to pay

This makes it difficult for valuers to establish a realistic and objective market value, particularly when recent sales are not reflective of broader market trends.

5. Inconsistent Valuation Standards

Although Nigeria has a regulatory framework through ESVARBON and NIESV, there are still cases of:

Unlicensed practitioners conducting valuations

Disparities in valuation outcomes for similar properties

Pressure from clients to inflate or deflate values

These inconsistencies can lead to loss of credibility in valuation reports and erode investor confidence.

6. Limited Use of Technology and Data Analytics

In many cases, property valuation is still largely manual in Nigeria. This limits:

Speed of data gathering

Accuracy in property comparisons

Integration with GIS, digital land registries, or real-time market data

As a result, valuers are often working with estimates rather than evidence, especially in less-organized urban neighbourhoods.

7. Regulatory and Policy Uncertainty

Frequent changes in government policies on land use, taxation, or urban development can affect valuation. Examples include:

Sudden demolition orders

New land use regulations

Double taxation by local councils

These uncertainties make it difficult to project property performance, particularly for long-term investment valuation.

Conclusion

While property valuation remains a critical part of Nigeria’s real estate ecosystem, especially in urban centres, it is not without its challenges. Addressing these valuation obstacles will require:

Better data collection and digitization

Enforcement of professional standards

Public awareness about the importance of certified valuations

Policy reforms that improve title security and transparency

Until then, real estate players in Nigeria’s urban market must work closely with registered and experienced estate surveyors and valuers to navigate these complexities and make informed decisions.