According to Risevest's Cost of Living Report 2025, property emerged as the most preferred investment asset among respondents in Nigeria, Ghana, Kenya, and Uganda. This wasn't a close race-real estate captured 22.32% of all investment allocations, beating stocks, mutual funds, and every other asset class.
The data tells a clear story: African investors are choosing property to balance risk, achieve stability, and secure long-term growth amid evolving economic conditions.
The Numbers Tell a Compelling Story
The Risevest report, which analyzed over 19,000 validated survey responses across the four countries, reveals how African investors are deploying their capital:
Investment Allocation Breakdown:
- Real estate: 22.32%
- Stocks: 20.51%
- Mutual funds: 18.10%
- Fixed deposits: 7.54%
- Cryptocurrency: 5.28%
- Agritech: 0.60%
- Other investments: 10.71%
- Non-investors: 14.93%
What stands out immediately is that 85.1% of respondents were active investors during 2025. This high participation rate demonstrates strong investment culture across these markets, with property leading as the primary wealth-building vehicle.
Why African Investors Choose Real Estate
Real estate has historically been a preferred investment in Africa, and for good reasons. Unlike stocks that can crash overnight or currencies that lose value rapidly, property offers something investors desperately need: tangible value you can see and touch.
Across Nigeria, Ghana, Kenya, and Uganda, investors increasingly use property to hedge against inflation and economic volatility. When your local currency weakens or inflation spikes, property values typically adjust upward, protecting your wealth in real terms.
The three primary attractions:
Income Generation: Rental properties provide monthly cash flow that can exceed returns from most other investment classes
Capital Appreciation: Property values generally increase over time, especially in high-growth urban areas
Inflation Hedge: Unlike cash that loses purchasing power, property values typically rise with inflation
The Two Paths to Property Investment
African investors have two main routes into real estate, each with distinct advantages:
Direct Property Investment
This traditional approach involves buying residential, commercial, or industrial assets outright. Returns come from rental income and capital appreciation when you eventually sell.
Advantages:
- Complete control over the asset
- Direct relationship with tenants
- Potential for significant capital gains
- Tangible asset you can leverage
Challenges:
- Requires substantial capital upfront
- Management time and expertise needed
- Illiquid (selling takes time)
- Concentration risk if you own just one property
Real Estate Investment Trusts (REITs)
REITs offer a pooled, professionally managed option where multiple investors own shares in a portfolio of properties. You earn income through dividends and can buy or sell shares relatively easily.
Advantages:
- Lower entry capital required
- Professional management
- Diversification across multiple properties
- More liquid than direct ownership
- Passive income without tenant headaches
Challenges:
- Less control over asset decisions
- Management fees reduce returns
- Share prices can be volatile
- Limited availability in some African markets
Nigeria's Growing REIT Market
Nigeria has developed one of Africa's most active REIT markets, offering both retail and institutional investors diversified opportunities.
Prominent Nigerian REITs include:
- SFS REIT
- UPDC REIT
- UH REIT
- MOFI Series 2 Real Estate Investment Fund
By December 2025, total mutual fund assets in Nigeria reached N7.67 trillion. Of this amount, real estate funds and REITs accounted for N483.06 billion, representing 6.30% of the total market.
While this percentage seems small, it represents massive growth from previous years and shows increasing sophistication among Nigerian investors who want property exposure without buying entire buildings.
What's Driving the Real Estate Preference?
Several factors explain why real estate captured the largest share of African investment portfolios in 2025:
1. Economic Volatility and Currency Weakness
Multiple African currencies experienced significant depreciation in 2024-2025. The Nigerian naira, Ghanaian cedi, Kenyan shilling, and Ugandan shilling all faced pressure against major currencies.
Property offers protection. While your currency weakens, property values typically adjust upward, especially in areas with international demand or dollar-linked pricing.
2. Inflation Hedging
Inflation across these four countries remained elevated throughout 2025. Real estate provides natural inflation protection—rents increase with inflation, and property values generally keep pace with or exceed inflation over time.
3. Banking Sector Challenges
Trust in traditional banking remains inconsistent across these markets. Interest rates on savings accounts often fail to match inflation, meaning depositors lose purchasing power even while "saving."
Property offers a tangible alternative where you see and control your investment.
4. Stock Market Volatility
While stocks captured 20.51% of allocations, many African stock markets experienced significant volatility in 2025. Property's relative stability appeals to investors seeking predictable returns.
5. Urbanization and Housing Demand
Rapid urbanization across all four countries creates sustained demand for housing and commercial space. This structural trend supports property values and rental income regardless of short-term economic cycles.
Risk Considerations Investors Must Understand
Real estate's dominance in African portfolios doesn't mean it's risk-free. Smart investors balance a property's advantages against real challenges:
Liquidity Risk: Property can't be sold quickly. If you need cash urgently, selling property takes months and often requires accepting below-market prices.
Market Timing Risk: Buying at market peaks can lock in years of zero or negative returns. The 2025 data reflects strong performance, but past results don't guarantee future outcomes.
Currency Risk: For diaspora investors, currency movements can significantly impact returns when converting rental income or sale proceeds back to foreign currencies.
Regulatory Risk: Government policies on rent control, property taxes, or foreign ownership can dramatically affect returns. Recent regulatory discussions in several African countries have created uncertainty.
Management Complexity: Direct property ownership requires ongoing management—tenant relations, maintenance, repairs, compliance. This "hidden cost" often surprises new investors.
What This Means for African Real Estate Markets in 2026
The strong preference for property investment has several implications for markets moving forward:
Supply Pressure: With 85% of surveyed investors active and real estate their top choice, demand for quality investment properties will likely exceed supply in prime locations, supporting prices.
REIT Market Growth: As more investors seek property exposure without management hassles, REIT markets in Nigeria, Kenya, and beyond should continue expanding, offering more options.
Price Differentiation: Prime properties in top locations will likely outperform secondary markets as sophisticated investors concentrate capital where returns and security are highest.
Infrastructure Impact: Strong property investment flows could accelerate development in emerging locations if infrastructure improves—something investors should watch closely.
The Bottom Line
Real estate's emergence as the dominant investment choice across Nigeria, Ghana, Kenya, and Uganda isn't accidental. It reflects rational decision-making by investors seeking stability, income, and growth in challenging economic environments.
Source: Based on Risevest's Cost of Living Report 2025 and analysis by Nairametrics
Check out our comprehensive Lagos Market Report H2 2025 for detailed analysis, pricing trends, and investment opportunities across Victoria Island, Lekki, Ikoyi, and emerging neighborhoods: https://troloppe.com/storage/reports/TPS_Lagos_City_Report_H2_2025.pdf